The conflicting news about the U.S. economy

October 1, 2012 at 10:02 am 1 comment

The Charlotte Observer does a good job explaining why reports on the U.S. economy appear to be conflicting:

Consumers are more confident but aren’t spending much. Fewer people are losing jobs, but not many are being hired. Home and stock prices are up, but workers’ pay is trailing inflation. Auto sales have jumped, but manufacturing is faltering.

This is what the article calls a “slow-growth rut.” In terms of jobs, while the number of people claiming unemployment is down, meaning that less people are getting laid off, at the same time companies are not hiring enough to bridge the jobs gap. And worse still– many people have stopped looking for work all together.

The Observer points out that the September jobs report will be published this Friday, and many economists believe that the national economy will show a modest increase in jobs– but nobody is expecting this to ramp up any time soon. As the Budget and Tax Center reported about the August jobs numbers, unemployment in NC decreased in some places but has seen troubling increases in others. In addition, the labor force has shrunk, indicating again that some people have given up looking for jobs:

While 13 out of the state’s 14 metro areas saw their unemployment rates drop over the last year, 98% of the state’s total employment growth since August 2011 occurred in just four high-growth metro areas—Charlotte-Gastonia (27%), Durham-Chapel Hill (16%), Greensboro-High Point (16%), and Raleigh-Cary (39%)—suggesting that the rest of state is just not experiencing significant job creation.

Even more troubling, the labor force numbers—the pool of workers who are either employed or looking for work—indicate that some metros may be worse than off the unemployment rate suggests. Over the past year, the labor force actually shrank in five metro areas—Hickory-Lenoir (down by 176 workers), Jacksonville (down by 234 workers), Rocky Mount (down by 28 workers), Wilmington (down by 4,180 workers, the biggest drop of any metro), and Winston-Salem (down by 2,900 workers).

For the foreseeable future, jobs and unemployment numbers should be taken with a grain of salt. Despite improvements in some areas, there are still many places where workers and families are struggling to find good jobs and keep them.

Entry filed under: Economic Development, Economy, Jobs & Employment. Tags: , , .

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