Economic Reports - Department of Commerce

NORTH CAROLINA ECONOMIC OVERVIEW: DECEMBER 2010 National and state indicators have been slightly negative recently, with employment and other indicators dropping over the last 2 months. Despite the short term setbacks both state and national trends still indicate economic growth is occurring. While hiring in November has been sluggish in most sectors there are some bright spots. The Finance, Education, Health Services, Information, and Other Services have added jobs this month. Housing has seen an improvement this month as well, with fewer new foreclosure filings since October. Looking past the setback in employment this month the improvements in the housing market and spending show that the economic recovery is on track for increased growth in 2011.

KEY N.C. INDICATORS AT A GLANCE Unemployment rate

9.7% Rate increased slightly from October with a continued decline in labor force

Total non-farm employment is down

-0.3% 12,500 jobs lost since October

Properties with foreclosure filings decreased -15.3% 2,262 new filings in November; 4,818 in October

Unemployment increases from previous month, labor force shows slight decline The number of employed workers decreased by 8,279 between October and November while the number of unemployed workers increased by 6,149. Despite the recent increase in the unemployment rate, from 9.6 percent to 9.7 percent, the number of unemployed workers has decreased, compared to the same month last year, for the last seven months. The North Carolina drop in unemployed workers compared to last year has been faster than the U.S. rate since December 2009.

Seasonally Adjusted Unemployment Rate Dec. 2007 - Dec. 2010 Start of Recession to Present

12

U.S. N.C.

10

8 6 4 2 0

N.C. Employment Security Commission, Labor Force Statistics North Carolina Seasonally Adjusted Labor Force Statistics Previous Month (11/10 compared to 10/10)

Oct-10

Nov-10

(revised)

(preliminary)

Labor Force 4,468,491 4,466,361 Employed 4,041,400 4,033,121 Unemployed 427,091 433,240 N.C. Employment Security Commission, Labor Force Statistics

Change % Change (2,130) 0.0% (8,279) -0.2% 6,149 1.4%

Last Year - Same Month (11/10 compared to 11/09)

Change % Change (68,276) -1.5% (14,599) -0.4% (53,677) -11.0%

Start of Recession (11/10 compared to 12/07)

Change (85,539) (295,277) 209,738

% Change -0.9% -6.0% 98.0%

Policy, Research & Strategic Planning; December 2010 Report

The change in the labor force was small, but the shifting of workers from employed to unemployed was the main factor in the unemployment rate increase of 0.1 percentage points. The state’s unemployment rate is 1.0 percentage point lower than it was in November 2009, but 4.9 percentage points higher than it was at the start of the recession. In November, the national unemployment rate was 9.8 percent and recently released U.S. data has the national unemployment rate for December at 9.8 percent.

Labor Force

NC Labor Levels Jan. 2010 - Nov. 2010

Employed

4700000 4600000 4500000 4400000 4300000 4200000 4100000 4000000 3900000 3800000 3700000

N.C. Employment Security Commission, Labor Force Statistics

A leading indicator of future unemployment rates are initial unemployment benefit claims. New initial claimants totaled 57,943 in November, an increase of 799 from October. The top five occupations of those claiming unemployment for the first time are: 1) Laborers and Freight, Stock, and Material Movers (hand); 2) Truck Drivers, Heavy and Tractor-Trailer; 3) Production Workers, All Other; 4) Cashiers; 5) Helpers of Production Workers. Nearly two-thirds (65%) of the workers in the top twenty occupations fall into three major occupational categories: Construction and Extraction, Production and Transportation & Material Moving.

Oct-10 North Carolina

52,435

Initial Unemployment Benefit Claimants Last Year - Same Month Previous Month 12 Month Average (9/10 compared to 10/10) Nov-10 ( 10/10 compared to 10/09) (Beg. of 12/09 - End of 11/10) Change % Change Change % Change 56,952

4,517

8.6%

32,804

-36.5%

68,219

The monthly unemployment rate increased for 99 counties since last month Unemployment rates reversed their recent downward trend for nearly every North Carolina County. Only one county did not experience month-over-month increases in the unemployment rate, Davie County. In Davie County’s case the unemployment rate remained unchanged from October to November. Of the counties that experienced an unemployment rate increase the average increase in unemployment rate was .92 percentage points. One county has an unemployment rate below 6 percent this month, Orange County, compared to three counties below 6 percent in October. Four of the 10 counties with the lowest unemployment rate for November are in the Research Triangle Regional Partnership. Currituck, Chatham, Hyde, Dare, and Orange counties have been among the top five counties in unemployment for the last 6 months. This month Hyde and Dare fell from the top 5. They were replaced by Gates and Watauga counties, which have the 4th and 5th lowest unemployment rates for November, respectively.


When seasonal fluctuations are controlled for by examining a twelve month average unemployment rate, Orange County (6.3%) has the lowest rate. Aside from Orange, Currituck (6.6%), Chatham (7.2%) and Gates (7.3%) are the only counties with rates below 7.5%. Total non-farm employment decreased; the trade and leisure experienced the most significant job losses Preliminary data suggest:  Since last month (October 2010) North Carolina has lost 12,500 nonfarm payroll jobs. o The Trade, Transportation, and Utilities sector and Leisure and Hospitality each accounted for nearly 28% of the gross job loss. o Education and Health Services made up 75% of gross job gains.  Over the past twelve months the state has lost 6,100 nonfarm payroll jobs. o The Professional and Business Services, Education and Health Services, and Information sectors are the only groups to post job gains over the last twelve months.  Since the start of the recession the state has lost 281,800 non-farm jobs. o The Construction Sector has lost more than 81,000 jobs since the start of the recession. This amounts to 1 in 3 construction jobs that existed prior to the recession. North Carolina Nonfarm Employment Trends by Supersector Sector Mining & Logging Construction Manufacturing Trade, Transportation, & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government Total Nonfarm Employment

Oct-10

Previous Month (11/10 compared to 10/10)

Nov-10

(revised) (preliminary) 6,000 6,000 172,500 170,200 433,600 432,000 712,900 707,700 70,800 71,100 198,400 199,500 483,000 479,400 546,800 551,600 391,800 386,600 159,400 159,600 725,000 724,000 3,900,200 3,887,700

Last Year - Same Month (11/10 compared to 11/09)

Change % Change 0 0.0% (2,300) -1.3% (1,600) -0.4% (5,200) -0.7% 300 0.4% 1,100 0.6% (3,600) -0.7% 4,800 0.9% (5,200) -1.3% 200 0.1% (1,000) -0.1% (12,500) -0.3%

Change 0 (9,400) (1,900) (2,500) 2,500 (400) 14,400 4,400 (6,500) (3,500) (3,200) (6,100)

% Change 0.0% -5.2% -0.4% -0.4% 3.6% -0.2% 3.1% 0.8% -1.7% -2.1% -0.4% -0.2%

Start of Recession (11/10 compared to 12/07)

Change % Change (900) -13.0% (81,500) -32.4% (100,400) -18.9% (72,400) -9.3% (1,100) -1.5% (12,700) -6.0% (27,200) -5.4% 18,800 3.5% (18,500) -4.6% (15,900) -9.1% 30,000 4.3% (281,800) -6.8%

U.S. Bureau of Labor Statistics, Economy at a Glance Data, Nonfarm Wage and Salary Employment


Workers affected by closings & layoffs decreased, monthly data is below four & twelve month averages The number of workers affected by announced closings and layoffs1 decreased between October and November and the number of announcements decreased as well. Monthly levels of announced closings and layoffs for October and November were below the 4-month and 12-month averages. The revised October number for approximate number of workers affected is above the 4 and 12 month averages. Announced Business Closings and Layoffs in North Carolina

Announced Closings & Layoffs Approximate # of Workers Affected

Oct-10

Nov-10

4 Month Average

12 Month Average

(revised)

(preliminary)

(Beg. of 8/10 - End of 11/10)

(Beg. of 12/09 - End of 11/10)

90

59

110

98

2,440

1,260

2,321

2,138

N.C. Employment Security Commission, Announced Business Closings and Permanent Layoffs Data

Foreclosures held constant from last month while home sales and building permits declined Data from the North Carolina Association of Realtors reveal a 15.3% decrease in foreclosures between October and November, yet a more significant 24.7% increase from this time last year. Existing home sales decreased from last month and last year by 5.7% and 28.3% respectively. New housing units authorized by building permits, an indicator of future construction, were down 4.4% from last month and 5.7% from a year ago. Oct-10 (revised)

North Carolina Housing Market Statistics Last Year - Same Month Previous Month Nov-10 (11/10 compared to 10/10) (11/10 compared to 11/09) (preliminary) Change % Change Change % Change

12 Month Average (Beg. of 12/09 - End of 11/10)

4,085 Properties with Foreclosure Filings 4,818 4,083 (735) -15.3% 810 24.7% Existing Homes - Units Sold 5,712 5,387 (325) -5.7% (2,124) -28.3% 6,640 Housing Units Auth. by Bldg. Permit 2,365 2,262 (103) -4.4% (136) -5.7% 2,854 RealtyTrac; N.C. Association of Realtors, Existing Homes Sales Data; U.S. Census, Table 2-New Privately Owned Housing Units Authorized

1

These data are derived from a statewide survey of newspaper accounts of closings and layoffs and from information supplied to the Employment Security Commission of North Carolina by the employing units experiencing the closings/layoffs. These data are not all inclusive and do not meet the Labor Market Information Division standard for accuracy.


NATIONAL ECONOMIC UPDATE Revised 3rd Quarter Gross Domestic Product estimate higher than originally reported  Real Gross Domestic Product – the output of goods and services produced by labor and property located in the United States – increased at an annual rate of 2.6 percent in the third quarter of 2010, (that is, from the second quarter to the third quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased at an annual rate of 1.7 percent.  Motor vehicle output added 0.49 percentage point to the third-quarter change in real GDP after subtracting 0.06 percentage point from the second-quarter change. Final sales of computers added 0.29 percentage point to the third-quarter change in real GDP after adding 0.03 percentage point to the second-quarter change. Manufacturer’s Shipments, Inventories and Orders  New orders for manufactured durable goods in November decreased $2.6 billion or 1.3 percent to $193.7 billion according to the U.S. Census Bureau. This decrease, down three of the last four months, followed a 3.1 percent October decrease.  Shipments of manufactured durable goods in November, also down three of the last four months, decreased $0.7 billion or 0.3 percent to $195.8 billion. This followed a 1.0 percent October decrease.  Inventories of manufactured durable goods in November, up eleven consecutive months, increased $1.9 billion or 0.6 percent to $319.1 billion. This followed a 0.6 percent October increase. Personal Income & Consumer Spending  Real disposable income increased 0.2 percent in November, the same increase as in October. Real personal consumption expenditures increased 0.3 percent in November, compared with an increase of 0.5 percent in October. Real disposable income and expenditures are adjusted for inflation to better reflect actual changes in income and spending. For comparison, nominal personal consumption expenditures increased $43.3 billion, or 0.4 percent. Housing  Single-family housing starts in November were at a rate of 465,000. This is 6.9 percent above the revised October figure of 435,000. Single-family building permits in November were 416,000, up 3.0 percent from the revised October figure of 404,000.  Sales of new single-family houses in November were at a seasonally adjusted annual rate of 290,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.5 percent above the revised October rate of 275,000, but is 21.2 percent below the November 2009 estimate of 368,000.

If you would like to be added to the distribution list please contact: Jared Wiener, Director of Economic Analysis, PRSP ([email protected], 715-4199) Michael Haley, Policy Director, PRSP ([email protected], 715-6373) Report Author: Derek Ramirez – Economist Additional Report Contributors: Anna Lea – Market Research Analyst Previous Monthly Overviews are available on Commerce’s website by clicking here or at the link below: http://www.nccommerce.com/en/AboutDOC/PublicationsReports/EconomicDevelopmentReports/MonthlyOverview.htm
