By George Shaw
Summary
The jobs market continues to send conflicting signals. The unemployment rate continues to improve while millions remain outside of the workforce. Job openings continue at near record highs and exceed unemployment by 25%. Increases in employment, however, continues to disappoint. North Carolina is the only state among the ten largest for population to have rates of unemployment and virus deaths below the national average.
Raleigh also continues to outperform its peer group of 13 high growth metro areas. Yet, employment locally in the lowest paying category (Leisure and Hospitality) continues to struggle. Meanwhile, our area ranks third among the high growth hubs for job categories paying above average salaries.
National
The three main sources of data on employment tracked by the federal Bureau of Labor Statistics continue to give conflicting signals. This is because they measure different things for different purposes. There are currently 25% more job openings than there are unemployed at the national level. North Carolina presently has about 50% more job vacancies than the number who are unemployed.
The Job Openings and Labor Turnover Survey (JOLTS) – reported 10.4 million openings in August, the second highest amount ever recorded. This is down from 11.1 million in July.
Job categories that pay more than average declined 3% to 3.5 million openings in July. Categories with lower than average compensation also decreased 3% with 5% growth in Retail Trade Positions and a 11% reduction in Leisure & Hospitality. In addition, Education and Health whose pay is close to the average dropped 12% in job openings.
Total hires decreased 6% while separations grew by 3% in August, leaving about an increase of only 300,000 employees. According to this measure, the net decrease in Leisure & Hospitality was approximately 250 thousand jobs at the national level.
The highest vacancy rates are in Leisure & Hospitality (10.1%), Professional & Business Services (7.9%) and Trade, Transportation & Utilities (6.8). The lowest rates among the major categories are in Government (3.5%) and Construction (4.4%).
North Carolina’s labor market continues to be robust in comparison to most other states. Its 7.3% vacancy rate is the eighth highest among the states. Its hiring rate of 5.2% is the ninth highest and its 4.9% separation rate is the eighth highest nationally. Similarly, its percentage of quits is the sixth highest and layoffs/discharges the fifth highest.
Household Survey. The most widely quoted measure is the unemployment rate which continued its decline to 4.8% at the national level in September, down from 5.2% in August. This comes from a monthly survey of households. Total unemployment nationally remains 7.7 million in September vs. 8.4 million in August. These figures (the Bureau of Labor Statistics U-3 Series) represent a relatively narrow definition of employment. A broader measure (U-6) includes marginally attached and part time employees). It declined to 8.5% of the labor force in August. That means that nearly 14 million are either unemployed or underemployed.
Establishment Survey. The final monthly assessment is the survey of business establishments. The increase in employment in September was again disappointing (194 thousand), masking a decline of 144 thousand for local government education. Leisure & Hospitality grew 74 thousand while Transport & Warehousing increased 47 thousand and Leisure & Hospitality rose 46 thousand.
How does the establishment survey data compare with total employment before the pandemic? The United States was down 8.5 million in civil employment in September 2021 compared to the level if there had been no pandemic. This was an improvement of about 300,000 in the last month.
North Carolina
The unemployment rate in North Carolina was 3.6% in February 2002 and peaked at 12.9% in April of last year. It was 4.3% in August 2021 and was 4.2% in September The rate for the Tar Heel state is now 0.6% lower than the national average. The final section of this article discusses unemployment and the virus in more detail.
However, private sector employment in North Carolina increased only 4,000 in September after a decrease of 12,000 in August. Professional & Business Services accounted for nearly all of the increase.
Wake County
The unemployment rate for our county declined from 3.9% in July to 3.7% in August while private sector employment rose 0.2%. A broader index of unemployment that includes part-time and discouraged workers is a more complete measure of the labor situation in Wake County. This expanded definition increases unemployment in our country from the reported 3.7% to about 7% in August.
Which categories of employment are growing and which are not?
Total employment in Wake County grew by 0.9% in September. Most of the increase was in government staff for education. Private employment rose 0.2% in September but employment in lower wage areas decreased 0.6% last month. This data was not seasonally adjusted, a major issue in September as the employment usually shrinks as students go back to school in areas such as Leisure and Hospitality.
Total employment in Wake County declined slightly to 5.3% during the year to September 2021 when adjusted for the growth in the labor force as well as seasonal factors. The rate was 5.4% during the prior month.
Strongest growth has been in higher wage areas such as Construction as well as Professional & Business Services. Employment in segments that pay above average are 2.3% below expected numbers. In addition, there has been significant growth in Trade, Transportation & Utilities where the pay is below average. The weakest recovery has been Leisure & Hospitality where employment remains down 17% adjusted for the growth in the labor force.
|
|||||||||||||||||||
|
|||||||||||||||||||
How Does Raleigh Compare to Other High Growth Hubs in Employment?
Raleigh has been grouped by McKinsey as a high performance hub with a dozen other mid-size metro areas. Wake County’s performance lagged many of the other hubs during the last month. However, it remained in the top half of the 13 areas for all categories over the last twelve months.
o Total Non-Farm Employment – 6th of 13 high growth hubs trailing Austin, Tampa, Charlotte and San Antonio. Our area ranked 4th best last month.
o Total Private Sector Employment – 4th of 13 behind Austin, Tampa and Charlotte. The Raleigh area was 5th best last month.
o Higher Wage Segments – 3nd behind Austin and Tampa. It was 2nd best last month.
o Lower Wage Segments – 3rd behind Austin and Tampa. Our area ranked 2nd best last month.
o Leisure & Hospitality – 5th behind Tampa, San Antonio, Denver and Austin. The Raleigh area ranked 3rd best last month.
The Raleigh area has also recovered more rapidly than the overall country for both higher as well as lower paying segments of employment. Yet, it lags in jobs for Leisure & Hospitality, the lowest paying category.
Comparing North Carolina to Other States – Unemployment and COVID-19 Deaths
States have had different strategies to combat the virus. Measures such as lockdowns and restrictions on businesses have had significant economic repercussions especially in terms of employment and unemployment. How has North Carolina fared compared to the other 49 states in terms of employment and deaths from COVID?
North Carolina’s unemployment rate is 4.2% as of September 2021. This is below the national average of 4.8%. The Tar Heel State has had around 1,700 reported deaths from the virus per million population. This is 25% below the national average of 2,296 deaths per million.
he best way to compare the states is with a matrix indicating where the unemployment and virus death rates are higher or lower than the national average.
Lower unemployment/lower virus death rates (17 states). North Carolina is the only one of the ten most populous states to have rates below both national averages. Most of the states in this quadrant are relatively small and heavily rural. Only Virginia and Oregan have both Democratic Governors as well as legislatures. Six other states in this group are similar to North Carolina in having one branch of state government run by Republicans and one by Democrats. The remaining nine states are led exclusively by Republicans.
Lower unemployment/higher virus death rates (10 states). The only large states in this quadrant are Georgia and Michigan. The remainder all has Republican governors and legislatures.
Higher unemployment/lower virus death rates (9 states). These include Illinois and Ohio. California also falls here – it is tied with Nevada for the highest rate of unemployment in the country (7.5%). Most of the smaller states in this quadrant have Democratic governors and legislatures.
Higher unemployment and virus death rates (13 states). These include New Jersey, New York, Pennsylvania, Texas and Florida. The smaller states in this quadrant are a mixture of Republican, Democratic or mixed leadership.
So what is the overall picture across all of the states? States with unified Republican leadership have 45% of the country’s population compared to 37% for states controlled by Democrats and 18% for states with mixed leadership. The average unemployment rate for Republican led states is 4.7%, 5.1% for mixed leadership and 6.7% for states led by Democrats. However, 50% of the deaths from COVID-19 are in Republican led states, 16% for states with mixed leadership and 32% for Democrat led states.
The picture is different since the beginning of July when the Delta variant of COVID-19 began to have significant impact. 67% of the deaths have been in Republican led states, 12% in states with mixed leadership and 21% in Democrat led states. 64% of the residents of Democratic states have completed their vaccinations. This compares with 61% for states with mixed leadership and 53% for ones led by Republicans.
#
