Jobs data turn worse
Unemployment expected to rise well into 2009
By Richard Craver | Journal Reporter
Published: September 20, 2008
North Carolina's chances of posting any kind of economic recovery the rest of this year are growing dimmer, economists said yesterday.
The state's unemployment rate reached a 61/2-year high of 6.9 percent in August, the N.C. Employment Security Commission reported. The unemployment rate was 6.6 percent in July.
And unlike most years, when the jobless rate falls during the fall months as teachers go back to work and holiday-season hiring begins, economists say that the rate is likely to keep rising well into 2009.
"It's now a lock that the state unemployment rate will go above 7 percent," said Michael Walden, an economics professor at N.C. State University.
"I forecast a very slow holiday spending and hiring season," Walden said.
That could mean that the Triad's rate, which recently has been a half-percent higher than the state's rate, could approach 8 percent by year's end as the recent 570 job cuts at R.J. Reynolds Tobacco Co. are felt locally. The Triad unemployment rate was 7.1 percent in July.
The employment security commission will report the local unemployment rate for August on Friday.
Walden predicted in early January -- when the state's unemployment rate was 4.7 percent -- that the state's rate would exceed 6 percent this year.
Since then, the financial and housing crises have combined to squeeze the local economy harder than was initially thought, Walden said.
"Money is hard to get and standards are high," he said. "This is impacting both commercial and household borrowing.
"The credit market is the lifeblood of the economy. Without flows of credit, the economy locks up."
Mark Vitner, a senior economist at Wachovia Securities, said that most of the recent surge in the state's jobless rate is more a factor of a slowdown in hiring rather than a dramatic increase in layoffs.
But because more layoffs are likely as companies try to do more with fewer employees, Vitner also believes that the state unemployment rate will remain on an upward path into 2009.
"We may see the jobless rate fall back a few tenths of a percentage point in September and October," he said.
"Layoffs are rising, however. We look for the unemployment rate to top out at 7.2 percent by year end and to average around 7.5 percent next year," Vitner said.
The decline in the national economy is having an effect on North Carolina's employment picture, said Harry Payne Jr., the chairman of the employment-security commission.
"We are experiencing a very tight job market and we have a lot of job seekers," Payne said.
North Carolina is not alone in having increased competition for job vacancies.
A report by the U.S. Bureau of Labor Statistics found that there were 2.6 job seekers for every available job in the nation during July, or 8.8 million unemployed Americans and 3.4 million job openings. By comparison, there were 1.6 job seekers for every job opening in December 2006.
"The number of job seekers per job openings is now firmly in recessionary territory -- at a higher level than during any month of the official 2001 recession -- and it shows no signs of leveling off," said Heidi Shierholz, an economist with Economic Policy Institute, a research group based in Washington.
"Millions of dedicated, productive American workers are experiencing the hardship and insecurity of unemployment with little hope of finding a job," Shierholz said. "The job-openings data represent one more strong indicator of the need for a second stimulus package that is targeted directly at job creation."
The employment-security commission reported that there were 35,247 fewer North Carolinians in the labor force, partly related to some public-school teachers going back to work and college students returning to campus. Both groups typically are considered as unemployed during the summer months.
A record 314,729 residents were considered as unemployed by the commission during August. The number of North Carolinians considered as unemployed has increased by 102,025 since August 2007.
The state lost 4,400 jobs in the professional and business services sector and 1,500 in the trade, transportation and utilities sector. It gained 2,700 in the leisure and hospitality services and 1,400 in educational and health services.
"While job orders have varied depending on the location around the state, we are still hearing from employers who need workers," Payne said.
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
By Richard Craver | Journal Reporter
Published: September 20, 2008
North Carolina's chances of posting any kind of economic recovery the rest of this year are growing dimmer, economists said yesterday.
The state's unemployment rate reached a 61/2-year high of 6.9 percent in August, the N.C. Employment Security Commission reported. The unemployment rate was 6.6 percent in July.
And unlike most years, when the jobless rate falls during the fall months as teachers go back to work and holiday-season hiring begins, economists say that the rate is likely to keep rising well into 2009.
"It's now a lock that the state unemployment rate will go above 7 percent," said Michael Walden, an economics professor at N.C. State University.
"I forecast a very slow holiday spending and hiring season," Walden said.
That could mean that the Triad's rate, which recently has been a half-percent higher than the state's rate, could approach 8 percent by year's end as the recent 570 job cuts at R.J. Reynolds Tobacco Co. are felt locally. The Triad unemployment rate was 7.1 percent in July.
The employment security commission will report the local unemployment rate for August on Friday.
Walden predicted in early January -- when the state's unemployment rate was 4.7 percent -- that the state's rate would exceed 6 percent this year.
Since then, the financial and housing crises have combined to squeeze the local economy harder than was initially thought, Walden said.
"Money is hard to get and standards are high," he said. "This is impacting both commercial and household borrowing.
"The credit market is the lifeblood of the economy. Without flows of credit, the economy locks up."
Mark Vitner, a senior economist at Wachovia Securities, said that most of the recent surge in the state's jobless rate is more a factor of a slowdown in hiring rather than a dramatic increase in layoffs.
But because more layoffs are likely as companies try to do more with fewer employees, Vitner also believes that the state unemployment rate will remain on an upward path into 2009.
"We may see the jobless rate fall back a few tenths of a percentage point in September and October," he said.
"Layoffs are rising, however. We look for the unemployment rate to top out at 7.2 percent by year end and to average around 7.5 percent next year," Vitner said.
The decline in the national economy is having an effect on North Carolina's employment picture, said Harry Payne Jr., the chairman of the employment-security commission.
"We are experiencing a very tight job market and we have a lot of job seekers," Payne said.
North Carolina is not alone in having increased competition for job vacancies.
A report by the U.S. Bureau of Labor Statistics found that there were 2.6 job seekers for every available job in the nation during July, or 8.8 million unemployed Americans and 3.4 million job openings. By comparison, there were 1.6 job seekers for every job opening in December 2006.
"The number of job seekers per job openings is now firmly in recessionary territory -- at a higher level than during any month of the official 2001 recession -- and it shows no signs of leveling off," said Heidi Shierholz, an economist with Economic Policy Institute, a research group based in Washington.
"Millions of dedicated, productive American workers are experiencing the hardship and insecurity of unemployment with little hope of finding a job," Shierholz said. "The job-openings data represent one more strong indicator of the need for a second stimulus package that is targeted directly at job creation."
The employment-security commission reported that there were 35,247 fewer North Carolinians in the labor force, partly related to some public-school teachers going back to work and college students returning to campus. Both groups typically are considered as unemployed during the summer months.
A record 314,729 residents were considered as unemployed by the commission during August. The number of North Carolinians considered as unemployed has increased by 102,025 since August 2007.
The state lost 4,400 jobs in the professional and business services sector and 1,500 in the trade, transportation and utilities sector. It gained 2,700 in the leisure and hospitality services and 1,400 in educational and health services.
"While job orders have varied depending on the location around the state, we are still hearing from employers who need workers," Payne said.
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
Labels: layoffs, North Carolina
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