The North Carolina economy showed signs of improvement in September, according to the latest data from the U.S. Bureau of Labor Statistics and the Index of North Carolina Leading Economic Indicators. The state’s unemployment rate dropped to 3.3%, the lowest since February 2020, and several industry sectors added jobs over the month.
Unemployment rate falls to pre-pandemic level
The state’s unemployment rate fell from 3.4% in August to 3.3% in September, matching the national average and reaching the lowest level since before the COVID-19 pandemic hit. The number of unemployed people decreased by 2,000 to 173,600, while the number of employed people increased by 12,800 to 5,073,000. The labor force also grew by 15,000 to 5,246,600.
The unemployment rate in North Carolina has declined steadily since reaching a peak of 13.5% in April 2020, when the state was under a stay-at-home order and many businesses were closed or operating at reduced capacity. Since then, the state has gradually eased its restrictions and reopened its economy, allowing more people to return to work or look for new jobs.
Nonfarm employment increases across most sectors
The state added 17,500 nonfarm jobs in September, bringing the total number of nonfarm jobs to 4,945,300. This is an increase of 2.4% from a year ago, when the state had 4,827,800 nonfarm jobs. Most industry sectors saw gains over the month, with the exception of manufacturing and information, which lost 3,200 and 1,800 jobs respectively.
The largest gains were in leisure and hospitality (+3,800), education and health services (+4,500), trade, transportation and utilities (+4,700), and government (+2,500). These sectors have been among the hardest hit by the pandemic and are still recovering from the losses they suffered last year.
The professional and business services sector also added 3,100 jobs in September, continuing its trend of strong growth over the past year. This sector includes high-paying occupations such as lawyers, accountants, engineers and consultants.
Leading indicators suggest continued growth
The Index of North Carolina Leading Economic Indicators, a composite measure of four variables that predict future economic activity, increased by 0.2% in September to 106.8. This is the highest level since March 2020 and indicates that the state’s economy is likely to expand further in the coming months.
The index is composed of initial claims for unemployment insurance (a negative indicator), building permits for residential construction (a positive indicator), the average weekly hours worked in manufacturing (a positive indicator), and the interest rate spread between 10-year Treasury bonds and federal funds (a positive indicator).
The index shows that the state’s economy is recovering from the impact of the pandemic, but still faces some challenges and uncertainties. The initial claims for unemployment insurance, which reflect the number of people who lose their jobs or are temporarily laid off, decreased by 3.4% in September, but remained above the pre-pandemic level. The building permits for residential construction, which reflect the demand for new housing, increased by 2.6% in September, reaching a record high since the data series began in 1990. The average weekly hours worked in manufacturing, which reflect the production level and labor demand in the sector, increased by 0.3% in September, indicating a modest improvement in activity. The interest rate spread, which reflects the expectations of future economic growth and inflation, increased by 0.1% in September, suggesting a positive outlook for the economy.
The index is compiled by Dr. Michael Walden, a professor of economics at North Carolina State University, and is based on data from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau and the Federal Reserve Board.
The North Carolina economy has seen a slight uptick in September, as the unemployment rate fell to a pre-pandemic level and several industry sectors added jobs. The leading indicators also suggest that the state’s economy will continue to grow in the near future, but there are still some challenges and uncertainties ahead. The state’s recovery depends on various factors, such as the vaccination rate, the spread of new variants of the virus, the consumer confidence and spending, and the fiscal and monetary policies.
