By George Shaw
Summary
Unemployment continues to decline at national, state and local levels. The rate for Wake County dropped to 2.6% in December 2021 was the lowest since 1999.
Overall employment continues to rebound at all levels but relatively slowly. Wake County’s employment remains 4.6% below a rate adjusted for the growth in its labor force during the last two years. The shortfall is most pronounced in Leisure & Hospitality where employment is down 13%.
The monthly update of the Misery Index will be covered in this week’s companion piece focused on COVID-19. The Misery Index compares the states in terms of the rate of unemployment as well as mortality from the virus.
National
The three main sources of data on employment tracked by the federal Bureau of Labor Statistics are telling different stories because they focus on different things. There are currently 73% more job openings than there are unemployed at the national level. North Carolina presently has 66% more job vacancies than the number who are unemployed.
The Job Openings and Labor Turnover Survey (JOLTS) reported 10.9 million openings in December, the third highest amount ever recorded. This is up from 10.8 million in November but slightly below the all-time high of 11.1 million last July and October.
Job categories that pay more than average increased less than 1% to 3.78 million openings in December. Categories with lower than average compensation increased by 2% with 18% growth in Leisure & Hospitality.
Total hires and separations each decreased 5% in December, leaving a decline of 28,000 employees. This coincided with the rise of the Omicron variant of the virus. The largest reduction in hires was in Professional & Business Services (159,000); reductions in separations were spread across all major categories.
The number of employees that quit dropped 4% to 4.3 million, the third highest figure on record. This 154,000 drop was primarily composed of reductions in Education & Health (95,000) and Leisure & Hospitality (60,000).
The overall vacancy rate for jobs is 6.8%, shy of the record of 7.0% set in October 2021. The highest vacancy rates are in Leisure & Hospitality (9.9%), Professional & Business Services (8.0%), and Education & Health (8.0%). The lowest rates among the major categories are in Construction (4.3%) and Government (4.5%).
North Carolina’s labor market continues to be positive in comparison to most other states. Its 6.9% vacancy rate is the 20th highest among the states. Its hiring rate of 5.2% is also the 12th highest and its 5.2% separation rate is the 9th highest nationally.
Household Survey
The most widely quoted measure is the unemployment rate which continued its decline to 389% at the national level in December, down from 4.2% in November. It has subsequently risen to 4.0% in January. This comes from a monthly survey of households. Total unemployment nationally dropped from 6.8 million in November to 6.3 million in December but rose again to 6.5 million in January.
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 parttime employees). It declined to 7.1% of the labor force in January. That means that about 11.6 million are either unemployed or underemployed.
Establishment Survey
The final monthly assessment is the survey of business establishments. Employment in December increased 450,000 jobs, up from growth of 250,000 the previous month. Leisure & Hospitality grew 163,000, Professional & Business Services 88,000 and Trade, Transportation & Utilities 85,000 jobs.
North Carolina
The unemployment rate in North Carolina was 3.7% in December 2021 down from 3.9% the prior month and a COVID-era peak of 13.5% in April-May 2020. It has been lower than December’s rate only for two time frames:
o The period immediately preceding the bursting of the dot.com bubble (May 1998 to May 2000). The lowest rate was 3.1% in January-February 1999.
o The time frame just before the onslaught of COVID-19 (November 2019 to January 2020) when the rate was 3.5%.
Private sector employment in North Carolina increased 20,000 in December after growth of 9,000 in November. Growth in December was led by Leisure & Hospitality (7,100 jobs), Trade, Transportation & Utilities (5,500 new employees) as well as Education & Health (4,400 positions).
Wake County
The unemployment rate for our county declined from 2.8% in November to 2.6% in December while private sector employment rose 0.7%. The only period when our county’s unemployment rate was generally lower than the most recent figure was from 1994 to 1999.
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 2.6% to about 5.5% in December.
Which categories of employment are growing and which are not? Private sector employment only grew 1,100 in October. Trade, Transportation & Utilities increased by 2,200, offsetting slight declines in Leisure & Hospitality as well as Education & Health.
Total employment in Wake County declined 4.6% during the year to December 2021 when adjusted for the growth in the labor force as well as seasonal factors. The rate was 4.8% during the prior month.
Employment in segments that pay above average are 1.7% below expected numbers vs. areas with compensation below average which are down 5.7%. Leisure & Hospitality remains 13.1% below employment figures from a year before.
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 during December at a rate comparable or slower than most of the other hubs. Our area remained in the top half of the 13 areas for all categories over the last twelve months.
o Total Non-Farm Employment – 5th high growth hubs trailing Austin, Charlotte, Tampa, and San Antonio.
o Total Private Sector Employment – 5th behind Charlotte, Tampa, Austin, Tampa, and, Denver. The Raleigh area was 6th best last month.
o Higher Wage Segments – 3nd behind Austin and San Antonio.
o Lower Wage Segments – 5th behind Tampa, Denver, Austin and Charlotte. The Raleigh area was 4th best last month.
o Leisure & Hospitality – 3rd behind Tampa and San Antonio. The Raleigh area ranked 5th best last month.
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