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Triad jobless rate at 10.4%
Figure expected to go up as rates are just beginning to reflect 12 major layoffs
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Published: March 20, 2009
Stunning. Mindboggling. Chilling. Numbing.
Those are just a few of the words that economists used yesterday in reaction to the reality that one out of every 10 able-to-work residents in the Triad is unemployed.
The economists cautioned that the Triad's unemployment rate, which rose nearly two percentage points to a 41-year high of 10.4 percent, is likely to surpass 11 percent in coming months.
That's because the effect of at least 12 major layoffs -- involving more than 3,450 workers -- is just beginning to show up in the region's jobless rates.
"There also are a lot of job cuts out there that has nothing to do with big layoffs, but they add up over time because this broad-based recession is affecting most industries," said Andrew Brod, the director for the center of business and economic research at UNC Greensboro.
All of which had economists and employment officials grasping for silver linings amid the bleak jobless news.
"About the best that can be said is that Forsyth County is not doing too badly compared to surrounding counties or compared to all counties in the state," said Archie Hicks, the manager of the N.C. Employment Security Commission's office in Winston-Salem.
The jobless rate in Forsyth rose to 8.9 percent in January from 7.4 percent in December.
"Only 12 counties have a lower unemployment rate for January than Forsyth," Hicks said. "That being said, 8.9 percent is indicative of the worsening economic situation. What is most alarming is the size and rate of the increases month to month."
The employment-security commission was only able to track the Triad's jobless rate back to 1968, spokesman Larry Parker said. The previous high was 10 percent in March 1983.
The January rates rose sharply, in part because of the annual recalculation of how the commission measures employment data. The benchmarking is required to meet federal guidelines.
Parker said he can understand, given the dramatic increases, if some people question the accuracy of the commission's report.
"We believe the numbers are accurate," he said. "More than 50 percent of our claims are attached, meaning the employer is filing on their behalf. So the layoffs have certainly affected the numbers greatly."
Among the 14 counties in the Triad and Northwest North Carolina, the average increase in the jobless rate was 2.5 percentage points. Alleghany County ‘s climb was the steepest -- 4.5 percentage points to 14.7 percent.
"A good scenario is that the rate of deterioration in the labor market levels off by the summer, and given the current trends, we could see the state's unemployment rate approach 11 percent or higher this summer" from 9.7 percent in January, said Todd Cherry, an economics professor at Appalachian State University in Boone.
"The unemployment rate is a lagging measure, so even if we begin to see improvements in the economy, it will take some time for this to translate to a stronger labor market," Cherry said.
For the Winston-Salem metropolitan statistical area, the jobless rate climbed 1.7 percentage points to 9.3 percent. The area consists of Davie, Forsyth, Stokes and Yadkin counties.
The revised commission figures showed the Winston-Salem area losing 4,500 jobs during January, including 1,200 in the trade, transportation and utilities sector; 800 in leisure and hospitality; and 700 each in government and manufacturing. All nine employment sectors lost at least 100 jobs.
By comparison, the Greensboro-High Point MSA rose 1.9 percentage points to 10.5 percent. That MSA consists of Guilford, Randolph and Rockingham counties. It was reported to have lost 10,400 jobs during January.
"Unless there is some quick, dramatic improvement in the economy, the rates are likely to increase," Hicks said.
John Quinterno, a research associate at the N.C. Budget & Tax Center, said that the sharp rate increases "are chilling" because they will "further compound the difficult situation facing state legislators coping with severe budget shortfalls."
"While the federal-recovery package likely will slow the decline, conditions have deteriorated even more rapidly than the package's architects envisioned," Quinterno said.
Parker said that as of yesterday, the state has had to borrow about $283 million from the U.S. Labor Department to meet its initial obligations in unemployment benefits. The state's Unemployment Trust Fund ran dry in February. The commission has a $540 million credit line that it can tap.
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
Misery loves company
Every county in the Triad and Northwest North Carolina experienced a sharp increase in its jobless rate in January:
County - December rate - January rate
Alamance - 9.4 percent - 10.9 percent
Alleghany 10.2 percent 14.7 percent
Ashe - 10.1 percent - 13.5 percent
Davidson 9.7 percent 12.1 percent
Davie - 8.3 percent - 10.3 percent
Forsyth 7.4 percent 8.9 percent
Guilford - 8.3 percent - 9.9 percent
Randolph 8.9 percent 11.1 percent
Rockingham 10.1 percent - 12.9 percent
Stokes 7.9 percent 10.2 percent
Surry - 9.8 percent - 12.7 percent
Watauga 5.7 percent 8.1 percent
Wilkes - 9.2 percent - 12.3 percent
Yadkin 7.9 percent 10.6 percent
Source: N.C. Employment Security Commission
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