George Shaw
Summary
The unemployment rate nationally, for North Carolina and for Wake County, all continued to decline. The rate for Wake County dropped from 3.7% to 3.1% in September, the most recent data that has been released.
Overall employment continues to rebound at all levels. Wake County’s employment grew 1.4% in October led by an increase of more than 4% in Leisure & Hospitality, the lowest paying job category.
North Carolina continues to outperform most states in both its unemployment rate as well as the mortality percentage from the virus. The Tar Heel State has a combined rating of 78% of the national average which is lower than all but 12 of the states.
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 40% more job openings than there are unemployed at the national level. North Carolina presently has 64% more job vacancies than the number who are unemployed.
The Job Openings and Labor Turnover Survey (JOLTS) – reported 10.4 million openings in September, the third highest amount ever recorded. This is down from 11.1 million in July and 10.6 million in August.
Job categories that pay more than average increased 6% to 2.3 million openings in September. Categories with lower than average compensation increased by 4% with 15% growth in Leisure & Hospitality.
Total hires decreased 0.5% while separations grew by 6% in September, leaving about an increase of 240,000 employees. This increase was primarily spread across Trade, Transportation Utilities; Government; Leisure & Hospitality; and Professional & Business Services.
The overall vacancy rate for jobs is 6.6%, down slightly from 6.7% in August. The highest vacancy rates are in Leisure & Hospitality (9.4%), Professional & Business Services (7.8%) and Information Services (7.6%) and Education & Health (7.4%). The lowest rates among the major categories are in Government (3.7%) and Construction (4.3%).
North Carolina’s labor market continues to be very active in comparison to most other states. Its 7.0% vacancy rate is the 16th highest among the states. Its hiring rate of 4.8% is the 14th highest and its 5.2% separation rate is the 17th highest nationally. Similarly, its percentage of layoffs/discharges is the seventh highest.
Household Survey. The most widely quoted measure is the unemployment rate which continued its decline to 4.6% at the national level in October, down from 4.8% in September. This comes from a monthly survey of households. Total unemployment nationally remains 7.4 million in October vs. 7.7 million in September. 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 8.3% of the labor force in October. That means that about 13.5 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 upbeat with an increase of 531,000 jobs, masking a decline of 73,000 for government employees. Leisure & Hospitality grew 164,000, complementing significant growth in Trade, Transportation & Utilities (104,000) Professional & Business Services (100,000).
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 September 2021 and was 4.1% in October. The rate for the Tarheel state is now 0.5% lower than the national average.
Private sector employment in North Carolina increased 32,000 in October after growth of 8,000 in September. Leisure & Hospitality accounted for 40% of the rise.
Wake County
The unemployment rate for our county declined from 3.7% in August to 3.1% in September while private sector employment rose 1.3%. 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 3.1% to about 6.5% in August.
Which categories of employment are growing and which are not?
Non-farm employment in Wake County grew by 1.4% in October, an increase from 0.9% in September. The increase was spread across lower paying categories (Leisure & Hospitality and Trade, Transport & Utilities) as well as Education & Health as well as Government services.
Total employment in Wake County declined slightly to 4.7% during the year to October 2021 when adjusted for the growth in the labor force as well as seasonal factors. The rate was 5.0% during the prior month.
Strongest growth over the last year has been in higher wage areas such as Construction as well as Professional & Business Services. Employment in segments that pay above average are 2.0% 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 13.5% adjusted for the growth in the labor force.
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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 improved faster than many of the other hubs during the last month. Our area remained in the top half of the areas for all categories over the last twelve months.
o Total Non-Farm Employment – 5th of 13 high growth hubs trailing Tampa,Austin, San Jose and Charlotte.
o Total Private Sector Employment – 6th of 13 behind Tampa, Austin, Charlotte, San Antonio and Denver. The Raleigh area was 4th best last month.
o Higher Wage Segments – 3nd behind Austin and San Antonio. It was 3rd best last month.
o Lower Wage Segments – 2rd behind Tampa. Our area also ranked 2nd best last month.
o Leisure & Hospitality – 4th behind Tampa, San Antonio, and Denver. The Raleigh area ranked 5rd best last month.
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. And states with lower rates of wearing masks and vaccinations have had higher mortality rates in recent months.
How has North Carolina fared compared to the other 49 states in terms of employment and deaths from COVID? I have constructed an index to compare states by measuring their results as a percent of the national average. I call this the “misery index.”
North Carolina’s unemployment rate of 4.1% in October 2021 is 80% of the average of the states. Its mortality rate from the virus as of the end of last month was 1777 reported deaths per million population. That is 75% of the aggregate rate for all of the states. Our state’s combined rating is 78% of the national average. North Carolina currently ranks 13th among the 50 states as well as the District of Columbia for the misery index.
Which states have the best ratings as of October 2021?:
o Vermont – 40% of the national average. The Green Mountain State has an unemployment rate is tied for 4th best. It also has a rate of deaths from the virus that is the lowest in the nation (28% of the national average).
o Utah – 44% of the national average. The Beehive State unemployment rate is the second lowest; its virus mortality rate is the fourth lowest.
o Nebraska – 52% of the national average. The Cornhuster State has the lowest unemployment rate as well as the ninth lowest rate of deaths from the virus.
o Oregon – 65% of the national average. The Beaver State has the and the seventh lowest mortality rate.but ranks near the middle for its unemployment rate.
o New Hampshire – 53%. The Granite State ranks the seventh best for both criteria.
So what is the overall picture across all the political spectrum? States led by unified Republican governments have tended to fare better on unemployment but worse on proportionate virus deaths.
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 4.3%, 5.1% for mixed leadership and 6.3% for states led by Democrats. However, 49% of the deaths from COVID-19 are in Republican led states, 20% for states with mixed leadership and 31% 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. 65% of the deaths have been in Republican led states, 14% in states with mixed leadership and 21% in Democrat led states.
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