October labor market data for NC counties confirms that your view of the labor market depends on where you live

Yesterday, the Labor and Economic Division released October labor market data for all 100 counties.  The headline of the release was that the unemployment rate had dropped in 98 counties, or nearly all, in the past month.  It sounds like good news, and it is, but the new data also show that many parts of the state are still struggling mightily. As the Budget and Tax Center has noted before, you have to look deeper than the headline unemployment number to know whether employment prospects are actually improving.

Such a look behind the unemployment rate does show signs of labor markets improving year-over-year, primarily along the lines seen at the state and national level.  The number of unemployed people has declined since October 2013 in all counties and a majority of counties have seen gains in employment.

But it is not “mission accomplished” time yet. The October county data contain worrying signs that should not be glossed over.

The majority of counties have not caught up to pre-recession levels of employment. Employment prospects are still slow to emerge in many counties, particularly in the rural parts of the state. Sixty six counties have more unemployed people in October 2014 than they did in December 2007.

Even more concerning, roughly one-third of the counties registered declines in employment from October 2013 through October of this year. Beyond not having caught up to pre-recession employment, many parts of our state have taken a step back over the last year. Again, this troubling trend is most concentrated in rural counties.

So how could the unemployment rate go down even in counties that lost jobs over the last year? A partial answer is contained in the labor force data. The labor force is the combination of everyone who has a job and everyone that is actively looking for one. The October data shows that the labor force got smaller in roughly two-thirds of the counties in the state over the year.

In some cases, this is the result of people moving from rural communities toward the urban centers. In other cases, people fall out of the labor force when the lack of job prospects is so bad that people become discouraged and stop looking for work. This is important because anyone who does not report that they are actively looking for work is entirely excluded from the calculation of the headline unemployment rate. A declining unemployment rate is cause for celebration, but when the labor force is also shrinking, the labor market is not entirely healthy.

All told, there are encouraging and troubling elements to the October county labor market data. The recovery is mixed, partial, and in some places non-existent. As we all cheer for an actual Carolina comeback, keep your rally caps on because we ain’t there yet.

Data for how each county’s labor market has changed over the last year can be viewed here, and data on how each county compares to before the great recession can be viewed here.

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