Job gains don't keep area unemployment rate from rising

The Winston-Salem metropolitan statistical area received another good-news, bad-news economic update Friday.

With a net gain of 4,900 jobs, the four-county area of Davie, Forsyth, Stokes and Yadkin led the state in employment growth from August 2010 to August 2011, according to the N.C. Employment Security Commission.

The area outperformed the Charlotte-Gastonia-Rock Hill MSA (up 4,100 jobs), Raleigh-Cary MSA (up 3,700 jobs) and Greensboro-High Point MSA (down 900 jobs).

The bulk of the jobs in the Winston-Salem area came in education and health services (2,500) and the trade, transportation and utilities sectors (1,100).

But the additional hiring had no discernable impact on the region's jobless rate in the same period.

In fact, August's jobless rate for the Winston-Salem MSA was up 0.6 percentage point from 9.3 percent in August 2010. It was also up from 9.8 percent in July.

By comparison, the Triad's jobless rate was up 0.5 percentage point over the previous 12 months to 10.7 percent and up from 10.6 percent in July.

Still, with the Triad economy being as stagnant as it has been this year, any positive jobs news is welcome.

"I think this showing is incredibly important, reflecting significant effort by local business persons and entrepreneurs to market the area, capitalizing on good transport links, higher education institutions and competitive prices of real estate and labor," said Michael Walden, an economics professor at N.C. State University.

"Winston-Salem may very well fit the profile of a 'bargain' region that is attracting investors who see a large upside potential."

Mark Vitner, a senior economist with Wells Fargo Securities, called the year-over-year job growth encouraging.

"But we must also remember that Winston-Salem fell pretty hard during the recession," Vitner said.

"Winston-Salem is fortunate to have strong growth in education and health care, as well as retail trade. Manufacturing payrolls have also bounced back a bit."

In August, the Winston-Salem MSA had a single-month net gain of 4,000 jobs, including 2,600 in government. Most of the government jobs likely reflect the renewal of teacher contracts because teachers are listed as unemployed during the summer.

There was also a gain of 700 jobs in education and health services and 400 each in manufacturing and professional and business services.

The leisure and hospitality sector experienced a loss of 300 jobs, likely reflecting the ending of some summer jobs.

The positive jobs trend is expected to gather momentum over the next few months as Caterpillar Inc. begins ramping up production and its workforce. At full production, the axle-manufacturing plant will have 392 full-time and 118 contract employees.

"We're still in the very early stages of hiring and have less than 30 employees," Caterpillar spokeswoman Bridget Young said Friday.

"We expect the first axle will be complete in early November. There will be some positions available in November, but the majority of the hiring will begin in the first and second quarters of 2012."

Young referred job applicants to a company website, JoinTeamCaterpillar.com for more information.

Of the 14 counties in the Triad and Northwest North Carolina, the jobless rate for seven counties for August was higher than in August 2010, while the rate for six counties were lower and one was unchanged.

Allan Freyer, policy analyst with the N.C. Budget & Tax Center, said he is concerned about the lack of even decent progress on the state and local jobless rates in the past year because the bulk of hiring in August was related to teachers going back to work.

"Many of the public-sector job increases reported in counties and metros do not represent real hires and only mask the crumbling private-sector labor market," Freyer said.

"If seasonal government hiring is the only factor cushioning the labor market at this point, it's hard to see how eliminating those public-sector jobs through budget cuts will help bring down the unemployment rate."

Job cuts in state and local government agencies have offset 26 percent of the private-sector gains recorded in the state, said John Quinterno, a principal with South by North Strategies Ltd., a Chapel Hill research firm specializing in economic and social policy.

"Many labor market indicators are moving in the wrong direction and are offering little evidence that improvements are likely to occur later in the year," Quinterno said.