Feb. 6, 2017
North Carolina's headline unemployment rate sits basically where it was before the Great Recession, hovering around the 5 percent mark, and some economists are predicting another year of slow but steady growth. That may sound like an economy that has recovered and rebalanced, but this new"normal" is anything but.
Evidence abounds, in economic data and lived experience, that North Carolina's economy is far from hale and hearty.
First of all, the headline unemployment rate doesn't tell the whole story. It leaves out thousands of North Carolinians who were forced out of the labor market during and after the recession because there are simply not enough good jobs in many communities. We estimate there are 200,000 missing from the labor market who we would otherwise expect to be here given historic trends in our labor force participation.(Our estimate squares with figures reported by widely regarded NC State Economist Mike Walden).
If we included all of these "missing workers" North Carolina's unemployment rate would still be above 9 percent, instead of giving the impression that we are back to normal. This lack of full recovery is actually reflected in a less often reported official figure, the U-6 unemployment rate, which includes people who are only marginally attached to the labor market and people who have taken part-time jobs because they cannot find full-time employment. North Carolina U-6 unemployment rate sat at 9.8 percent up through the 3rd quarter of 2016, well higher than before the Great Recession.
To be clear, North Carolina's labor market is in better shape than it was several years ago. Buoyed by plodding but consistent growth in the national economy, and the continuing migration of people and business to the Southeast, job prospects in North Carolina are certainly much improved. The number of "missing workers" has come down from its peak of over 300,000 in late 2014, but we still have a long way to go before anything like full recovery will be reached.