North Carolina’s job growth slowed in second half of 2018, new data shows

The 2018 economic story in North Carolina is not what it once seemed. New labor market data released last week shows job growth in North Carolina slowing noticeably in the second half of last year, a stark departure from what previous data had indicated. Job growth had already decelerated in 2017 compared to the previous several years and now it appears that the situation toward the end of 2018 got even worse.

Over the last six months of 2018, year-over-year job growth averaged just 1.5 percent, below the national rate and significantly off the employment expansion clip that North Carolina had posted between 2013 and 2016. After outpacing U.S. growth for several years, along with much of the southeast, North Carolina had been running essentially even with the national rate for much of 2017. It had appeared that job growth in North Carolina was on the upswing again, but newly released data show that the state actually experienced a marked decline starting in September of last year. As can be seen here, previously released figures indicated that North Carolina had returned to growth rates above 2 percent, but revised data show it to still be well off that clip.

The data released last week diverge from previously published figures due to an annual “benchmarking” process conducted by the Bureau of Labor Statistics (BLS), which adjusts previously released survey estimates to reflect actual employment counts based on Unemployment Insurance filings. This process is conducted at the beginning of each year and the revised data for 2018 were published along with the January 2019 labor market release. In North Carolina’s case, previously released survey data overstated the rate of growth during the latter half of 2018 and updated figures tell a distinctly more worrisome story.

Instead of gaining strength during 2018, North Carolina’s economy lost steam, and the current rate of growth is not really improving the state’s overall employment picture. The percentage of working age North Carolinians that are working or looking for a job actually declined from during 2018, and remains well shy of pre-recession levels.

Employment and wage growth throughout the current expansion period has been historically weak and now it is clear that 2018 was actually worse than many of the preceding years. The lackluster performance in the last six months of 2018 increases the likelihood that North Carolina will encounter the next recession without having erased the damage from the last one, a troubling sign given the many threats that could tip the global economy back into the red.