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Job growth remains stagnant

Saturday, May 29, 2010
(Updated Sunday, May 30 - 6:15 am)

The unemployment rate in Greensboro fell below 10 percent in April, the first time that’s happened in the Gate City in a year, the Employment Security Commission of North Carolina reported Friday.

The rate also dipped in High Point, Winston-Salem, Burlington and Thomasville, plus Guilford and surrounding counties.

In some locales, April also marked the third consecutive month rates have declined.

“A lot of (places) are starting to level off or experience a drop in the unemployment rate,” said Larry Parker, an ESC spokesman. “If we can continue on this way in May, I would say, from an employment standpoint, we are headed in the right direction.”

But don’t break out the hats and horns just yet. The region’s employment problems won’t be over any time soon.

“We need to hold off on the celebration,” said John Quinterno, a principal with South by North Strategies, a Chapel Hill research firm. “There is nothing to really get too excited about. Most job markets, including Greensboro, are moving sideways.”

For example, Quinterno said, Greensboro posted an unemployment rate of 9.7 percent in April compared with 9.4 percent a year earlier.

“That’s really a year of no change,” he said. “A lot of people are going to look at the month-to-month change and think that this is a good report. (But) if you look at year over year, what appears to be good news doesn’t hold up to be good news.”

The ESC report shows that employment increased in the Greensboro-High Point metro area in April by 1,100 jobs, with 800 of those coming in the government sector.

Many of those jobs likely went to Census workers.

Statewide last month, employers added 7,500 more jobs than they eliminated.

But the drop in unemployment numbers only highlights the recession’s length and severity, said Alexandra Forter Sirota, a policy analyst with the N.C. Justice Center’s Budget & Tax Center in Raleigh.

In April, 63 counties — including Guilford and Randolph — still posted double-digit unemployment rates and 23 — including Rockingham — recorded rates of at least 12 percent.

Since the recession began in December 2007, unemployment in the state has increased 119 percent, Sirota said.

“To get us back to where we were prior to the recession and to cover the growth in the work force, we would need to add 400,000 jobs statewide,” she said. “That’s a pretty daunting number.”

At the state’s current rate of job creation, it would take nearly five years to produce that many positions. In January, she said, a national estimate suggested there were six workers for every job opening.

And there’s another issue.

As the economy recovers, unemployed workers will return to the labor force looking for jobs, which could lead to future spikes in the unemployment rate.

In addition, much of the recent job growth has resulted from government actions such as temporary census hiring, housing tax credits, emergency unemployment insurance payments and stimulus funding.

“Many of these supports are phasing out and it is unclear if enough private-sector demand exists to take their place,” Quinterno said in a report issued last week. “The next few months could be quite difficult for North Carolinians seeking work. Conditions could start deteriorating again.”

Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com

 

Accompanying Photos

File photo (Associated Press)

Comments

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Andrew Brod

May 28, 2010 - 12:15 pm EDT

This is good news, but these are not seasonally adjusted numbers, and it's easy to read too much into them. For the more reliable adjusted numbers, check in with the Dixon Hughes Triad Business Index early next week, at www.triadbusinessindex.com.

rmacz

May 28, 2010 - 9:36 pm EDT

I hope you're right Andrew, but I believe we need to get through the election.
http://news.yahoo.com/s/ap/20100520/ap_on_bi_go_ec_fi/us_economy;_ylt=Ag...

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