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December Jobless Rates Mixed in High Country, Political Think Tanks Analyze State Data Differently



By Jesse Wood

Feb. 6, 2014. The jobless rate for December 2013 decreased in 86 of the 100 counties in North Carolina. While three others remained the same, 11 counties increased, according to figures released by labor division of the N.C. Department of Commerce. 

Ashe County was among the 11 counties where the unemployment rate increased. For December, Ashe County’s rate increased by 0.2 percent to 8.3 percent.

Watauga County, which saw its unemployment rate decline by 0.1 percent to 5.6 percent, still has one of the lowest rates in the state. Avery County saw a bigger drop in the jobless rate, a 0.6 decline to come in at 7.5 percent.

Over the year, Avery County’s official unemployment rate has dropped nearly 5 percent. Watauga saw a nearly 3 percent drop over the year, and Ashe had roughly a 3.5 percent decline over the year. 

See the entire report for December here. Also, see county-by-county rates in graph towards end of post. 

Depending on what think tank analyzes the numbers, December’s rate is either a “strong signal” that things are improving, as the conservative John Locke Foundation noted, or not as it appears because people are leaving the workforce in droves, as the liberal N.C. Justice Center wrote. 

John Locke Foundation: 

Latest Jobs Report Shows Strong Growth for N.C. Economy
December Data Shows Net Annual Gain of Nearly 65,000 Jobs

by John Hood

imgres-1Newly released employment data show signs of growing strength in the North Carolina economy, with the second-highest reported annual increase in new jobs in the state since the onset of the Great Recession. That’s the assessment of John Locke Foundation President John Hood.

The rate of job growth has increased in North Carolina since July, when extended federal unemployment insurance benefits ended in the state.

The N.C. Employment Security Commission’s latest report lists the state’s official unemployment rate at 6.9 percent for December 2013. That’s down a full one-half of a percentage point from the 7.4 percent rate reported in November. The official state unemployment rate was 9.4 percent in December 2012. 

The state rate remains 0.2 percentage points above the national rate of 6.7 percent. That’s the smallest gap between North Carolina’s rate and the national rate in more than a year.

“In the year ending in December 2013, North Carolina added 64,500 net new jobs,” Hood said. “That’s a higher number of new jobs than in all but one of the employment reports issued since North Carolina started dealing with the impact of the Great Recession.”

The December jobs report pokes holes in a key argument from left-of-center activists, who have contended that the end of extended federal unemployment insurance benefits in North Carolina would hurt the state’s employment picture.

“North Carolina has added jobs at a much faster rate in the second half of 2013 than it did in the first half of the year, when extended UI benefits were still in place,” Hood said. “That’s consistent with empirical research suggesting that extended benefits deter both creating and taking jobs. The picture for 2013 is also contrary to the pattern in 2012, when North Carolina’s job growth was somewhat stronger in the first half of the year than it was in the second half.”

The state’s labor force declined from 4.76 million in December 2012 to 4.65 million in December 2013, but Hood says that decline offers no more support for left-of-center arguments about unemployment insurance.

“Yes, North Carolina experienced a decline in the labor force, but so did the rest of the country,” he said. “The decline began in early 2013 and has been particularly large in Southeastern states. The state’s exit from extended unemployment benefits in July could not possibly be the cause of the trend. For example, Georgia experienced a similar decline in the labor force, and Tennessee a larger decline than North Carolina’s, even though both states retained their UI extended benefits through the end of 2013. Other demographic, regional, and sectoral factors not related to North Carolina public policies are clearly at work.”

The new data also rebut the notion that North Carolina’s improvements are based solely on poor measurement of workers struggling to find full-time work, Hood said.

“According to broader federal surveys of the labor market, North Carolina’s lower unemployment rate is not due to an increased number of either discouraged workers or those forced to take part-time jobs when they would rather be working full-time,” he said. “The most recent U-6 rate, which includes those groups, is an annual average ending in September 2013. For North Carolina, that rate is 14.9 percent. That’s a substantial decline from the 17 percent U-6 posted during the previous year.”

“It’s hard to look at the latest jobs report as anything other than a strong signal that North Carolina’s economy is improving,” Hood added. “The rate of improvement is also picking up strength, pouring cold water on the notion that the state’s economic health depends on continuing to pay people not to work.” 

 N.C. Justice Center: 

Drop In Unemployment Rate Due To Shrinking Labor Force
Only 1 out of Every 10 Formerly Unemployed Workers Found Employment Over Last Year

NC JusticeNorth Carolina’s unemployment picture is much worse than it appears on the surface, according to new numbers released by the N.C. Division of Employment Security today. Although the unemployment rate dropped to 6.9 percent in December, this is due almost entirely to a historic collapse in the state’s labor force, not to genuine gains in employment.

Over the last year, the labor force shrunk by 110,930 workers—more than 2.5 percent—to the lowest levels in three years.  A mathematical quirk in how the unemployment rate is calculated means that whenever the labor force goes down, the unemployment rate can also go down, even if genuine joblessness remains high.  That’s what happened from December 2012 to December 2013—only 13,414 unemployed workers found employment. The rest just gave up and dropped out of the labor force, meaning that just 11 percent of the drop in unemployed workers resulted from the jobless finding jobs.

“Only 1 out of every 10 formerly unemployed workers found jobs in the last year,” said Allan Freyer, Public Policy Analyst with the Budget & Tax Center, a project of the NC Justice Center. “At a time when there is just one available job opening for every three unemployed workers who need it, it’s no surprise that so few of North Carolina’s jobless workers are actually finding jobs.”

Even more troubling is the reality that job creation in 2013 performed far worse than in 2012, suggesting that North Carolina’s recovery is stalling. The year between December 2011 and 2012 saw the creation of 89,900 jobs, while the same period in 2013 saw the creation of 64,500 jobs.

“In recent months, we’ve heard claims that policies enacted in the first half of 2013 generated extra special job growth in the second half of 2013, or that 2013 represents a special year for the state’s labor market. But the reality is far different,” said Freyer.  “Across every meaningful measure of labor market progress, 2013 was a worse year than 2012.” 

Given seasonal hiring patterns, most economists prefer to compare the year-over-year. And when we compare the second half of 2012 to the same period in 2013, we find that 2012 performed better—2,000 more employed people and 5,000 more jobs from July to December 2012 than over the same period in 2013. 

Lastly, it is important to note that we should interpret all the numbers from December with great caution, as all 2013 survey data will be revised late next month.