WS Chronicle

N.C. economy ended 2017 headed in wrong direction

To the Editor:

Employment in North Carolina ended 2017 headed in the wrong direction. Between October and December, the official unemployment rate increased from 4.1. to 4.5 percent and the state lost over 15,000 jobs.

While these figures could be revised in the next few months, it’s not a good sign that employment appears to have declined at a time when holiday shopping historically creates a positive bump in employment.

“While lots of retailers reported strong holiday sales, and many political leaders were crowing about how great our economy is, the data for the end of 2017 tell a very different story,” said Patrick McHugh, policy analyst with the Budget & Tax Center, a project of the N.C. Justice Center. “We are coming off the slowest year of job growth in North Carolina in several years, and there’s a real danger of hitting the next recession before we’ve even fully dealt with the fallout from the last collapse.”

Here are a few of the indicators that point to a dip in economic growth:

*Slowest employment growth in several years: Employment expanded by 1.1 percent in 2017, the slowest rate of growth since 2014. In fact, growth in North Carolina has declined in each of the last two years after hitting 2.5 percent in 2015. This slowdown is particularly worrisome given that many communities, industries and families in North Carolina never fully recovered from the Great Recession.

*Holiday employment bump may be losing out to automation and online commerce: The dip in North Carolina employment at the end of 2017 is particularly striking given that we generally see an increase in employment as retailers and other employers staff up to meet the holiday shopping rush. Employment has increased between October and December in each of the three years preceding 2017 (up 13,000 in 2016, nearly 29,000 in 2015, and 11,000 in 2014). While it is too early to say with confidence that automation and online retail are responsible for the decline in holiday employment this year, there is a long-term trend toward replacing people with machines and computers in many retail sectors.

*Recovery in the level of employment has stalled: North Carolina remains well below the pre-recession level of employment, and the state made virtually no process in 2017. While employment increased over the year, so did North Carolina’s population. The state ended the year with 58.8 percent of its residents working, the same rate as the beginning of the year and well below pre-recession levels. All of this shows that North Carolina is not creating enough jobs to return to historic levels of employment and opportunity.

For more context on the economic choices facing North Carolina, check out the Budget & Tax Center’s weekly Prosperity Watch report at http://www.ncjustice.org/?q=node/880.

Budget & Tax Center of The N.C. Justice Center

Raleigh