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Triad jobless rate declines slightly
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Published: April 24, 2009
Updated: 04/24/2009 04:39 pm
The fever has broken on the blistering climb in the Triad's unemployment rate over the past year.
However, the decline in March unemployment numbers of 0.2 percentage points to 11.3 percent does not mean people should be relieved, economists and employment officials said yesterday.
Even though it was the first decline in six months, the jobless rate is still more than double the 5.3 percent level of March 2008.
"It's hard to think that a two-10ths of a percent drop is a promising sign when you can't see the end of the line of people needing help," said Archie Hicks, the manager of the N.C. Employment Security Commission's office in Winston-Salem.
The jobless rate in the Winston-Salem metropolitan statistical area decreased to 10.2 percent from 10.4 percent in February. The MSA consists of Davie, Forsyth, Stokes and Yadkin counties.
Forsyth County's rate dropped to 9.7 percent from 10 percent — one of just two counties in the Triad and Northwest North Carolina, along with Watauga County, with a rate below 10 percent.
"No one seems to think we've reached the peak of the jobless rate," Hicks said.
For example, Hicks said he's seen an increase in employers filing temporary unemployment claims for workers. It's a stopgap strategy for spreading their work over fewer days and keeping key staff.
"I take that as a good sign those employers are trying to riding out the economy," he said. "Still, it doesn't lessen the nervousness and financial pain of those employees dealing with short work weeks."
Another factor contributing to the rate decline in March was that more people dropped out of the labor market.
When it comes to determining the rate, the commission primarily counts people who are without a job and actively looking for work. Eventually, people who stop looking — whether out of frustration or by choice — are removed from the unemployment data.
For example, there were 2,192 fewer people considered as unemployed in the Triad during March, as well as a drop of 1,573 in residents listed with jobs.
Other people typically unaccounted for in the jobless data are stay-at-home spouses, retirees, full-time students, people attached to their former employer through severance packages, and people without jobs who have moved into the state.
The rate also doesn't account for people who are underemployed — those who are working in full- or part-time jobs below their skill levels. Economists say that if all those people were counted in the employment data, the jobless rate could be 3 percentage points higher.
"There are certainly larger numbers of people becoming discouraged after months of looking for re-employment," said Charles McMillion, the president and chief economist for MBG Information Services in Washington. McMillion focuses on the manufacturing sector, particularly in the Southeast.
"There may be some out-migration of jobless families in communities that are especially hard hit and/or have a relatively high cost of living," McMillion said. The factor could contribute to further slight decreases in the local jobless rate.
Todd Cherry, an economics professor at Appalachian State University, said he was encouraged that there were more counties in the region with a decline in their jobless rate than an increase.
"I think the March rates are a mix of people dropping out of the labor market and some gains in jobs," Cherry said. "In the previous months, nearly all counties experienced losses. "It is too early to say that is the bottom, but it is at least a break in the dramatic incline."
Randy Wooden, the operator of a local outplacement services company, said he heard a surprising level of optimism from some participants at Thursday's Business Expo in Winston-Salem.
"Some of the business had begun to see an uptick in orders," Wooden said. "So while the Triad may historically lag behind other metro areas, I get the sense of optimism in the air. Hardly great news, particularly for struggling businesses, but an encouraging sign nevertheless."
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