By George Shaw
The rate of unemployment has fallen dramatically since it peaked in April 2020. The rebound in job categories that pay above the average has been strong; the recovery in lower paying categories still lags. incentives in the Federal Stimulus programs have been reduced or eliminated. The number of those who remain food insecure remains high.
Overall Unemployment
The unemployment rate in North Carolina was 3.6% in February and peaked at 12.9% in April. The July rate of 8.5% declined to 6.5% in August. Although the unemployment roles were reduced by 100,000 in August, employment only increased by 28,000. The remaining 72,000 left the civilian labor force. Employment has rebounded 428,000 since April; the figure remains 421,000 lower than before COVID-19 impacted our state. Unemployment was 315,000 in August vs.182,000 in February.
The trend for Wake County is similar to those of North Carolina. February’s unemployment rate was 3.2% and it rose to 11.5% by May. The last reported rate was 8.0% in July; the forecast for August is only 6%. Unemployment was 23,600 in February and spiked at 77,000 in May. It is forecast to be about 42,000 in August.
Unemployment by Category
The impressive recovery in employment masks a divergence in our area. Most job categories that have higher than average pay have almost returned to levels from a year ago. Categories with wages roughly equal to or less than average pay have generally not recovered as well.
At the national level, the overall decline in the non-farm labor force since August 2019 has been 6.8%, the same rate as North Carolina’s. This compares with an 8.6% reduction for Wake County.
Raleigh’s decrease in the last year in categories that pay more than the average was only 2.3%. Raleigh’s rebound is surpassed only by Austin and Denver among the 13 high growth hubs, a peer group of high growth, technology rich metropolitan areas.
The lowest paying category is Leisure and Hospitality. Leisure and Hospitality’s employment remains more than 30% down compared to August 2020. Only San Jose (-38%) and Orlando (-32%) have significantly higher rates among the high growth hubs.
| Non-Farm Wage & Salary Employment – Raleigh/Cary Area | |||
| Category (data in thousands) | Aug-19 | Aug-20 | Change |
| Categories Higher Than Average | |||
| o Construction | 41.4 | 41.9 | 1.2% |
| o Manufacturing | 36.9 | 33.0 | -10.6% |
| o Information | 22.8 | 21.8 | -4.4% |
| o Finance | 34.4 | 34.4 | 0.0% |
| o Professional & Business Services | 127.5 | 125.8 | -1.3% |
| Subtotal | 263.0 | 256.9 | -2.3% |
| Categories Similar to Average | |||
| o Education & Health | 82.8 | 67.9 | -18.0% |
| o Government | 94.1 | 87.4 | -7.1% |
| Subtotal | 176.9 | 155.3 | -12.2% |
| Categories Lower Than Average | |||
| o Trade, Transport & Utilities | 111.8 | 107.8 | -3.6% |
| o Leisure & Hospitality | 75.6 | 52.3 | -30.8% |
| o Other Services | 25.9 | 24.6 | -5.0% |
| Subtotal | 213.3 | 184.7 | -13.4% |
| Non-Farm Employment | 653.2 | 596.9 | -8.6% |
| Source: www.bls.gov/regions/southeast/nc_raleigh_msa.htm | |||
Low Wage Assistance Program
The Low Wage Assistance Program initiated during the spring helped stabilize the economy as well as constrained the growth in food security and . Key programs have either been reduced in size or have lapsed.
North Carolina began issuing checks for the second phase of the federal Low Wages Assistance Program on September 3. These $300 weekly payments are half of the payouts from the prior phase. The federal fund is expected to run out with four of these payments. These payments are taxable income.
Impact on Food Insecurity
The underlying rate of food insecurity in Wake County was around 20% before the pandemic. Stabilizing programs such as the one-time $1200 stimulus checks as well as the weekly Low Wage Assistance Program helped cushion the impact of the economic downtown. However, the continued slow recovery of low paying jobs such as Leisure and Hospitality mean that the rate of food insecurity in our area remains elevated.
o Kiplinger (9/4/20) GDP will be back to 2019 levels by 2022; Unemployment below 5% by early 2023. Unemployment did not get back to a healthy level for seven years after the Great Recession.
Update on COVID-19 data for our area
The State of North Carolina tracks four primary metrics to determine whether to relax guidelines on reopening the economy. Three of these measures continue to show improvement in the last week. The exception has been the number of tests which is rising slowly over the last two weeks.
North Carolina’s metrics are good compared to the majority of states. It ranks 28th among the 50 states for the number of cases and 32nd for deaths from the virus on a per capita basis. It slipped from the 26th highest rate of tests to the 27th in the last week.
The number of new cases declined slightly from 8,492 two weeks ago to 8,477 last week. More significantly, the number of deaths dropped from 191 last week to 137. And the percent of positive cases and hospitalizations continues to drop.
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New cases in Wake County declined from 611 to 540 in the last week, a reduction of 12%. Deaths increased from 10 to 15.
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New cases in our Zip Code 27587 increased from 33 last week to 39 for the last seven days. There was one new reported fatality from the virus, the first since August 21.
Zip Code 27571 (Rolesville) reported 4 new cases this past week to bring its total to 76. Zip 27596 (Youngsville) rose from 214 to 222 cases. Zip 27571 has reported no deaths; Zip 27596 continues to report a single fatality.
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