Drop in unemployment rate due largely to shrinking labor force (video)

North Carolina’s unemployment rate dropped to 6.7 percent in January, but the decline is largely because the labor force continues to shrink not because of significant gains in employment, according to the NC Budget & Tax Center.  Over the last year, the state labor force contracted by 105,600 workers, more than 1.3 percent, to the lowest levels in three years.

“Only 4 out of every 10 unemployed workers found jobs in the last year,” said Allan Freyer, BTC Public Policy Analyst. “If North Carolina is going to see a healthy long-term recovery in employment growth, we need to see all jobless workers moving into jobs, rather than out of the labor force.”

Freyer believes that most of the job growth we’re seeing in North Carolina is due to improvements in the national economy, rather than something special happening in the Tarheel State:

“In recent months, we’ve heard claims that policies enacted in the first half of 2013 generated extra special job growth in the second half of 2013. But the reality is far different,” Freyer said. “Across every meaningful measure of labor market progress, the second half of 2013 failed to perform better than the second half of 2012.”

Freyer appeared on NC Policy Watch’s News & Views over the weekend to discuss the state’s struggling economy. For an excerpt of that radio interview, click below. You can listen to the full segment here.

The Budget & Tax Center’s takeaway message on the latest jobs report: North Carolina needs to create jobs at a much faster rate than the national average and its own recent historical performance.  Along with creating more jobs overall, the state needs to create better jobs that pay enough to allow workers and their families to make ends meet.


  1. LayintheSmakDown

    March 17, 2014 at 5:54 pm

    Funny how this post has already been debunked, John Hood has the other side…just in case anyone has any curiosity for another view.


    It is going to keep getting harder and harder to follow the blueprint of eviceration as people in NC see these types of real results, and actually get jobs.

  2. Alan

    March 17, 2014 at 7:39 pm

    Only “debunked” by the right wing crazies. I know, facts are hard to accept sometimes.

  3. LayintheSmakDown

    March 18, 2014 at 8:18 am


  4. Alan

    March 18, 2014 at 11:25 am

    Yeah, “blueprint of eviceration”. I guess Civitas et al. have resorted to recycling their “wurdz of the weak”, and have run out of things to say?

    I’m sure all of those folks unemployed, and unable to find work in this state, must be relieved at all the new jobs that McFlurry and team have been responsible for? I guess with them all working now, there’s obviously no need to expand Medicare?

  5. Lucinda

    March 18, 2014 at 11:13 pm

    I went and read the John Locke article. It doesn’t actually debunk the statements made in this article since the one refers mainly to the second half of the year and the other to the whole year.

    “Across every meaningful measure of labor market progress, the second half of 2013 failed to perform better than the second half of 2012.”


    “What’s clear from the revised data is that North Carolina’s jobs picture enjoyed more improvement in 2013 than in 2012, with more of that improvement taking place after July 2013 — when extended federal unemployment benefits ended in North Carolina,”

    For more numbers than you could possibly ever want, here’s the site that posts the actual data:

    That site had this comparison between 2012 and 2013: http://www.ncesc1.com/pmi/rates/PressReleases/County/NR_Dec2013_CountyRates_M.pdf

    When compared to the same month last year, not seasonally adjusted unemployment rates decreased in all 100
    counties. All 14 metro areas experienced rate decreases over the year.

    The number of workers employed statewide (not seasonally adjusted) decreased in December by 32,140 to 4,315,366, while those unemployed decreased 17,561 to 305,196. Since December 2012, the number of workers employed statewide increased 29,050, while those unemployed decreased 140,214.

    It is important to note that employment estimates are subject to large seasonal patterns; therefore, it is advisable to focus on over-the-year changes in the not seasonally adjusted estimates.

    My take on all of this is that eliminating the Unemployment Extension for the long-term unemployed has actually had very little (if any) effect on unemployment or the reduction in the workforce. Correlation does not equal causation.

    The idea that employers would say, “Gee, now that they’ve cut off support for the long-term unemployed I’d better hire hire some,” or that the unemployed would say, “Gee, now that I’m no longer getting unemployment, I guess I’d better go out and find a job,” is really rather ridiculous. Not to mention insulting to both employers and the unemployed.

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