Overview of North Carolina's economy : report

              Policy, Research & Strategic Planning; June 2011 Report
NORTH CAROLINA ECONOMIC OVERVIEW: JUNE 2011
North Carolina’s economy has been in a holding
pattern for the last few months. The
unemployment rate has been the same since
March. Since last month the State has lost 7,400
nonfarm positions. However, total employment has
increased by over 12 thousand. The discrepancy is
because total employment includes farm workers,
unpaid family workers, the self-employed, and
people on unpaid leave.
National indicators show continued slow growth.
Real GDP growth was revised to 1.9 percent in the
1st quarter of 2011 and analysts expect similar
growth for the 2nd quarter. Consumer confidence fell 3 points in May but housing authorizations increased 2.5
percent from the revised April estimate.
Employment and labor force increased compared to April, but labor force remains smaller than last year
The number of employed
workers in North Carolina
continued to increase in May,
growing by over 12 thousand
people since April and 41
thousand since December. The
labor force has also grown over
those two periods, adding 12
thousand potential workers
since last month and 39
thousand since December.
Compared to the same month
last year, however, the labor
force is 40 thousand people
smaller. To be counted in the
labor force a person has to
either be employed or have
sought employment sometime in the last 4 weeks. In May of 2009 the labor force was larger than it was in
May of 2008. Since then the labor force has been smaller than it was in the same month the previous year,
marking 2 consecutive years of decline.
North Carolina Seasonally Adjusted Labor Force Statistics
Apr-11 May-11
(revised) (preliminary) Change % Change Change % Change Change % Change
Labor Force 4,489,137 4,501,276 12,139 0.3% (39,929) -0.9% (59,121) -1.3%
Employed 4,053,878 4,065,918 12,040 0.3% 15,168 0.4% (268,240) -6.2%
Unemployed 435,259 435,358 99 0.0% (55,097) -11.2% 209,119 92.4%
N.C. Employment Security Commission, Labor Force Statistics
Start of Reces s ion
(5/11 compared to 12/07)
Previous Month
(5/11 compared to 4/11)
Last Year - Same Month
(5/11 compared to 5/10)
KEY N.C. INDICATORS AT A GLANCE
N.C. Unemployment Rate unchanged
9.7%
Rate is unchanged from April
U.S. Unemployment Rate increased
0.1%
9.1% in May from 9.0% in April
Existing Home Sales increased
10.1%
7,627 in May from 6,926 in April
3,700,000
3,800,000
3,900,000
4,000,000
4,100,000
4,200,000
4,300,000
4,400,000
4,500,000
4,600,000
Labor Force
Employed
NC Labor Levels
June 2010 - May 2011
N.C. Employment Security Commission, Labor Force Statistics
Policy, Research & Strategic Planning; June 2011 Report
The North Carolina unemployment rate remains unchanged for the 3rd consecutive month at 9.7 percent.
Meanwhile, the U.S. unemployment rate increased 0.1 percentage points, from 9.0 percent to 9.1 percent.
Despite the increase in the unemployment rate the Nation added 105 thousand employed workers over the
last month. The increase was offset, however, by a 167 thousand person rise in unemployment. The increase
in unemployed workers may be a sign that people view the job market as more favorable than in previous
months and have started seeking employment.
NC Economy loses jobs since last month, close to May 2010 levels
Preliminary data suggest:
 Since last month (April 2011) the economy lost 7,400 jobs.
o Financial Activities gained 1,500 jobs, the largest job increase since last month.
o Professional and Business Services had the largest job loss, losing 4,000 positions.
 Over the past twelve months employment has been relatively flat with a net loss of only 1,000 jobs.
o Service and knowledge based “White collar” industries have grown 1.6 percent versus 0.2 percent
growth in labor intensive “Blue collar” industries. Both totals exclude the Government sector.
 Since the start of the recession
o Education and Health Services is the only sector to have gained employment.
Seasonally Adjusted Unemployment Rates
Apr-11 May-11
(revised) (preliminary) % Point Change % Point Change % Point Change
North Carolina 9.7% 9.7%
United States 9.0% 9.1%
N.C. Employment Security Commission, Labor Force Statistics
Last Year - Same Month
(5/11 compared to 5/10)
Previous Month
(5/11 compared to 4/11)
Start of Recession
(5/11 compared to 12/07)
4.7%
4.1%
-1.1%
0.1% -0.6%
0.0%
North Carolina Nonfarm Employment Trends by Supersector
Apr-11 May-11
(revised) (preliminary) Change % Change Change % Change Change % Change
Mining & Logging 5,700 5,700 0 0.0% 100 1.8% (1,200) -17.4%
Construction 169,800 170,700 900 0.5% (8,000) -4.5% (81,500) -32.3%
Manufacturing 435,600 435,300 (300) -0.1% 3,100 0.7% (97,700) -18.3%
Trade, Transportation, & Utilities 721,500 720,100 (1,400) -0.2% 7,100 1.0% (60,300) -7.7%
Information 67,500 67,700 200 0.3% (400) -0.6% (4,500) -6.2%
Financial Activities 202,500 204,000 1,500 0.7% 6,600 3.3% (7,900) -3.7%
Professional & Business Services 502,400 498,400 (4,000) -0.8% 19,200 4.0% (7,600) -1.5%
Education & Health Services 538,400 537,100 (1,300) -0.2% (3,600) -0.7% 3,600 0.7%
Leisure & Hospitality 397,300 397,700 400 0.1% 8,000 2.1% (7,700) -1.9%
Other Services 156,800 154,400 (2,400) -1.5% (600) -0.4% (21,100) -12.0%
Government 693,000 692,000 (1,000) -0.1% (32,500) -4.5% (2,800) -0.4%
Total Nonfarm Employment 3,890,500 3,883,100 (7,400) -0.2% (1,000) 0.0% (288,700) -6.9%
U.S. Bureau of Labor Statistics, Economy at a Glance Data, Nonfarm Wage and Salary Employment
Previous Month
Sector (5/11 compared to 4/11)
Start of Reces s ion
(5/11 compared to 12/07)
Last Year - Same Month
(5/11 compared to 5/10)
Policy, Research & Strategic Planning; June 2011 Report
Existing home sales and building permits in May higher than April levels
Data from the NC Association of Realtors show a 10.1 percent increase in existing home sales between April
and May. An increase in existing home sales is a good sign for a housing market clearing out excess inventory.
Housing authorizations increased slightly last month, 2.7 percent higher than April. Housing authorizations
were 7.2 percent lower than the same month last year. Foreclosure filings were lower in May than the month
before and 38.3 percent lower than the same month a year ago.
Existing home sales remain below pre-recessionary levels
North Carolina
fared better than
many other
states during the
last recession
with respect to
housing. The
chart on the right
shows monthly
existing housing
sales since
January 2008.
Due to the
cyclical nature of
the industry, the
chart presents
the data for each
month with a
different color
corresponding to
one of four years.
Housing sales
tend to peak in the early summer, between May and July each year. They also see a small rise in December as
families close sales in order to claim tax benefits for the calendar year. The chart shows existing housing sales
did not start declining in North Carolina until after July 2008. Housing sales were at their lowest from
November 2008 to February 2009. In February 2009 the Home Buyer Tax Credit was expanded and helped
temporarily boost housing sales. This effect continued throughout 2010 when the tax credit expansion was
extended in July. Home sales in early 2011 kept pace with 2010 in January and February but have fallen
behind in the last two months. While sales in 2011 are above their 2009 levels they are still more than 18
percent lower than sales in 2008 for each month of 2011.
North Carolina Housing Market Statistics
Apr-11 May-11
(revised) (Preliminary) Change % Change Change % Change
Properties with Foreclosure Filings 2,784 2,689 (95) -3.4% (1,668) -38.3%
Existing Homes - Units Sold 6,926 7,627 701 10.1% (1,488) -16.3%
Housing Units Auth. by Bldg. Permit 2,136 2,193 57 2.7% (171) -7.2%
Last Year - Same Month
(5/11 compared to 5/10)
RealtyTrac; N.C. Assoc. of Realtors, Existing Homes Sales Data; U.S. Census, Table 2-New Privately Owned Housing Units Authorized
Previous Month
(5/11 compared to 4/11)
1,953
3,698
12 Month Average
(Beg. of 6/10 - End of 5/11)
6,462
0
2,000
4,000
6,000
8,000
10,000
12,000
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
2008 2009 2010 2011
North Carolina Existing Home Sales
Jan. 2008 -May 2011
Source: NC Association of Realtors
Monthly Home Sales
Policy, Research & Strategic Planning; June 2011 Report
NATIONAL ECONOMIC UPDATE
National economic growth remains slow in the short run, challenged by the implications of severe spring weather, Japanese supply chain disruptions, and low consumer confidence and spending. Sluggish payroll growth has also contributed to negative consumer sentiment. GDP, however, is expected to continue slow growth through the second quarter, at around 2 percent.
National Gross Domestic Product (GDP)
 In the first quarter of 2011, Real GDP increased at an annual rate of 1.9 percent, according to a revised estimate by the Bureau of Economic Analysis. In the fourth quarter of 2010, real GDP increased 3.1 percent.
 Slow GDP growth, attributed to factors including the struggling housing market and severe spring weather events, may lead to only gradual reductions in unemployment.
Manufacturer’s Shipments, Inventories and Orders
 New orders for manufactured durable goods in May increased $4.0 billion or 2.1 percent to $196.3 billion, according to the U.S. Census Bureau.
 Shipments of manufactured durable goods in May, up five of the last six months, increased $0.9 billion or 0.4 percent to $195.0 billion. This followed a 1.4 percent decrease in April.
Personal Income & Consumer Spending
 Real disposable income increased 0.1 percent in May, compared with a decrease of approximately 0.1 percent in April, according to the Bureau of Economic Analysis.
 Personal income increased $36.2 billion, or 0.3 percent, in May.
 Real personal consumption expenditures (PCE) declined 0.1 percent in May, the same as a revised-downward real PCE decline of 0.1 percent in April, according the Bureau of Economic Analysis.
Housing
 Sales of new single-family houses in May 2011 were at a seasonally adjusted annual rate of 319,000, with a median sales price of $222,600 according to estimates released jointly by the U.S. Census Bureau and Department of Housing and Urban Development. This is 13.5 percent above the May 2010 sales estimate of 281,000 single-family houses.
 Single-family housing starts, an indicator of current economic activity, were at a seasonally adjusted rate of 419,000 in May.
 Single-family authorizations (building permits), an indicator of future economic activity, were at a seasonally adjusted rate of 405,000 in May; this is 2.5 percent above the revised April figure of 395,000.
Consumer Confidence
 National consumer confidence fell 3.2 points in June, down to 58.5, according to The Conference Board’s Consumer Confidence Index. This is down from a three-year high of 70.4 in February 2011.
If you would like to be added to the distribution list please contact:
Jared Wiener, Director of Economic Analysis, PRSP (jwiener@nccommerce.com, 715-4199)
Report Author: Derek Ramirez – Economist
Additional Report Contributors: Glenn McLaurin - Intern
Previous Monthly Overviews are available on Commerce’s website by clicking here or use the link below:
http://www.nccommerce.com/research-publications/industry-economy/economic-reports