South Carolina's Labor Market Data Improved Markedly in September
South Carolina's labor market picture appeared to brighten in September as payroll employment jumped and the unemployment rate fell. As a note of caution, however, our Carolinas Survey of Business Activity suggested that the region’s economic expansion slowed since then and overall labor demand remained quite soft.
On a seasonally adjusted basis, payroll employment in South Carolina jumped in September on strong contributions from both the private and government sectors, following two straight monthly declines. The 13,700 net increase (7,200 in the private sector and another 6,500 in the public sector) was the second largest monthly advance since the recovery got under way. And, encouragingly, the gains were widespread across industry segments. The leisure and hospitality industry, which had been shedding jobs more or less steadily since March, led the monthly gains in September with roughly 4,600 net new jobs. Financial services firms and those engaged in private education and health care services and "other services" also added 1,000 jobs or more during the month. The trade, transportation, and utilities sector saw an increase of approximately 700 jobs, as did manufacturing, which continued to rebound from a material decline in July. Government employment was up by 6,500, with the bulk of those jobs added in local government educational services (4,300), but also with a significant contribution from state government (2,100 jobs). On the down side, construction employment was off by 1,000 in September, continuing a back and forth trend over the last several months that has kept total industry employment in the 75,000 neighborhood. That is well below the peak of nearly 128,000 construction jobs established back in late 2006. Perhaps more disconcerting, employment in the professional and business services industry continued to trend down. This is an industry that had been a significant contributor to overall job gains in the state during much of the recovery, but has lost nearly 6,000 jobs over the past three months, with 1,100 of those jobs lost in September.
South Carolina's seasonally adjusted unemployment rate plummeted to 9.1 percent in September from 9.6 percent in August. When viewing this data, it is important to keep in mind that such large swings during a single month, whether they occur in the payroll employment series or the unemployment data, should be digested with a grain of salt. These data can be volatile from month to month and are subject to revisions that can be quite substantial. Moreover, the recent improvements in both measures effectively place the labor market back where it was in February, with the jobs count up slightly and the unemployment rate back to 9.1 percent.
Meanwhile, our Carolinas Business Activity Index dipped from September to October, although it remained positive, suggesting that the region's economy was expanding at a more modest pace. Despite the apparent expansion, survey responses suggest that firms remained cautious when it came to staffing decisions. Both labor demand indicators were virtually unchanged in October at levels suggestive of no change in aggregate labor inputs (workers or hours).