jne 2022 percent-change-in-nc-residents-looking-for-work-since-start-of-covid-19 (1)
Blog

It’s hot outside and on the job market (at least in some parts of NC)

June was a scorcher outside and in many local labor markets. Total hiring in NC continued at a rapid clip through the first six months of 2022, pushing total employment 130,000 jobs beyond pre-pandemic levels. Job openings have come down somewhat in the past few months compared to the peaks we saw in December 2021 and March this year, but there have still been tens of thousands more jobs on offer each month this year than in the corresponding months of 2019 before COVID-19.

All of these data show that we’re not in a recession yet, even given legitimate concerns about what may be coming down the road as the Federal Reserve continues to tighten policy to combat inflation.

As economists love to say, “on the other hand”…

The searing labor market in some communities is not a given throughout North Carolina. A number of indicators show that job opportunities have been heavily concentrated in a handful of urban areas that have driven North Carolina’s economic recovery from COVID-19:

  • Lack of employment recovery in many counties: Nearly half (49 of 100) of North Carolina’s counties still have fewer residents working than before COVID-19, and 33 of those never recovered all of the jobs lost during the Great Recession.
  • More people looking for work: There were more people actively looking for work during June than before COVID-19 in 86 of North Carolina’s counties. An increase in people looking for work is not an inherently bad thing because, in many cases, it reflects workers’ confidence that they can pursue better pay and benefits by leaving their previous job. Nationally, workers who switched jobs since the start of the pandemic are significantly more likely to have gotten a raise than workers who remain with the same employer. Most of the counties where there were fewer people looking for work were in some of our state’s most rural areas where job opportunities have been the slowest to recover.

  • Almost two-thirds of the jobs have been created in three metropolitan areas: North Carolina has recovered faster than the nation as a whole and now has over 130,000 more jobs than before COVID-19. This good news is tempered by the fact that Raleigh (30,800 more jobs), Durham-Chapel Hill (15,300), and Charlotte (38,300) collectively account for 63 percent of the net job growth since the start of the pandemic. At the other end of the spectrum, Greensboro-High Point, New Bern, Greenville, Goldsboro, and Rocky Mount still have not recovered all of the jobs lost at the start of the pandemic.

  • One out of 5 counties have not reached full employment: Economists use a general rule of thumb that a headline unemployment rate of around 5 percent equates to “full employment”, given that people should be moving between jobs in even the best economic conditions. While the state rate is well below that level, there are still 20 counties in North Carolina where the headline rate is above 5 percent. In places like Edgecombe County (8 percent), Scotland County (7.9 percent), Warren County (7 percent), Vance County (6.8 percent), Robeson County (6.6 percent), and Halifax County (6.5 percent), an elevated unemployment rate reflects a lack of job opportunities.

Stay tuned next week when the next reading on inflation comes out. If the Federal Reserve sees the inflation rate coming down, it could allay some of the push for higher interest rates, which would be good news for the labor market. We’ll also need to keep an eye on people’s lived economic experiences that may not be fully captured by the data. For example, the headline unemployment rate doesn’t capture people who were pushed out of the labor market by the pandemic and the need for continued growth to truly create opportunities for everyone that wants to work. Either way, North Carolina’s labor market is still quite healthy, at least for the time being.