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John Hood: Job growth sizzled

Job Growth Sizzled Last Year

March 18, 2015

 

By JOHN HOOD

 

RALEIGH — According to a recent High Point University poll, North Carolinians feel better about the direction of the economy than they have in many years. According to just-released data from the U.S. Bureau of Labor Statistics, North Carolinians seem to have a pretty good grasp of what’s going on in their job market, at least.

 

On March 17, BLS released a revised set of monthly employment numbers for North Carolina and other states going back to 2010. This is standard practice. BLS conducts a quarterly census of employers to go along with the monthly surveys you read about in the paper each month. BLS then routinely recalculates the survey data back in time using benchmarks from the quarterly census.

 

The bottom line is that we now have much harder numbers on recent employment trends in North Carolina, and can say with confidence that 2014 was the second-best year for job growth since the turn of the 21st century.

 

Here are the numbers. From December 2013 to December 2014, there was a net increase of 110,000 jobs in North Carolina, an increase of 2.7 percent. Only 2006 featured a higher rate of job creation, 3.9 percent. Otherwise you’d have to go back to the 1990s to find comparable gains in North Carolina — and even then, the average job-growth rate during the last decade of the 20th century was 2.4 percent, lower than the state’s gain for 2014.

 

If we compare North Carolina not to itself back in time but instead to other states, our 2014 performance on job creation still looks good. From December 2013 to December 2014, employment growth for the U.S. economy as a whole was 2.3 percent. For the 12 Southeastern states, including North Carolina, the average was 2.4 percent.

 

Job creation isn’t the only measure of an economy’s health. If more people enter the labor force seeking jobs than can find them, gains in employment may not be as impressive as they seem. Fortunately, the Bureau of Labor Statistics measures that phenomenon, too. Although the headline U-3 unemployment rate gets the most attention — it was 5.4 percent in December as well as January, slightly below the national average — a better measure of the health of the labor market is to include not just unemployed people actively looking for work but also discouraged workers who have dropped out of the labor force as well as those are moving, retraining, or working part-time because they can’t find full-time jobs.

 

For North Carolina, that all-inclusive U-6 rate was 12.1 percent in 2014, down from 14.7 percent the year before. By this “underemployment” measure, as well, our state compares favorably with other states and the nation in labor-market improvement. From 2013 to 2014, the U-6 rate fell by 1.8 points for the nation as a whole (to 12 percent) and by 1.5 points for the Southeast (to 12.2 percent). North Carolina’s 2.6-point drop was one of the biggest in the country.

 

To observe that North Carolina is doing comparatively well is not, of course, to claim that the state’s economy has recovered all the ground it lost during the Great Recession. Nor is it to claim that North Carolinians are delighted with the pace of improvement. Americans as a whole remain disappointed that the post-2008 recovery has been slower and less robust than the recoveries they are used to experiencing after other recessions.

 

My point here is simply that during 2014, North Carolina took some big steps in the right direction. If you’re inclined to think the state’s tax cuts and regulatory reforms were a good idea, you might describe 2014 as the first fruits of a new policy mix. Alternatively, if you dislike the state’s turn to the Right, feel free to argue that these policies have not been in place long enough to be responsible for last year’s upswing in job creation.

 

But if you’re trying to claim that the upswing in job creation didn’t happen at all, your argument is with the Bureau of Labor Statistics, not with me. Good luck.

 

-30-

 

Hood is chairman of the John Locke Foundation. Follow him @JohnHoodNC.

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