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New data show 2013 was strongest year for N.C. job growth since Great Recession

Revised unemployment numbers rebut popular talking point from political left

Contact: John Hood
919-828-3876
jhood@johnlocke.org

March 17, 2014

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RALEIGH -- Newly revised employment data show that 2013 was the strongest year for job growth in North Carolina since the Great Recession. Those numbers contradict liberal arguments about the impact of policies adopted by the conservative-led General Assembly, according to new analysis from the John Locke Foundation's president.

The N.C. Employment Security Commission's latest report lists the state's official unemployment rate at 6.7 percent in January, down 0.2 percentage points from December's revised rate of 6.9 percent.

The North Carolina rate remains above the national average of 6.6 percent. But the gap between the state and national rates is the smallest reported in more than a year.

Beyond the headline numbers, JLF President John Hood notes with interest new revisions in establishment-survey data the U.S. Bureau of Labor Statistics collects to help compute unemployment rates.

"According to the revised establishment-survey data, 2013 was the strongest year of job growth in North Carolina since the end of the recession," Hood said. "From December 2012 to December 2013, North Carolina employers added 85,600 positions, a 2.1 percent increase, compared with 73,200 net new jobs in 2012 (1.9 percent) and 49,600 jobs net new jobs in 2011 (1.3 percent)."

Those numbers contrast sharply with arguments from left-of-center pundits, who contend that North Carolina's economy suffered in comparison to other states during the first year of Republican Gov. Pat McCrory's administration. 2013 marked the first year that a Republican governor worked with the Republicans who took control of the General Assembly in 2011.

"Since the legislature began implementing conservative fiscal and regulatory reforms in mid-2011, North Carolina has added 180,000 net new jobs, a growth rate of 4.6 percent," Hood said. "That's higher than the national average of 4.3 percent job growth during the same period (June 2011 to January 2014)."

The newly revised establishment-survey data arrive less than a month after BLS released revised household-employment survey data. Those revisions also poked holes in liberal activists' arguments about North Carolina's employment picture. A key argument from the left contended that North Carolina's economy suffered after state officials allowed federal extended unemployment insurance benefits to go away in July 2013.

Preliminary household-survey numbers suggested North Carolina's labor force declined by 111,000 in 2013, while the number of employed people grew by 13,000. The revised numbers showed that the labor force declined by 67,000, while the employment number grew by 33,000.

For the last six months of 2013, the period after extended unemployment insurance benefits ended in the state, the number of employed North Carolinians rose by about 27,000 while the labor force declined by 39,000.

Hood examined the revised household survey data. "During the last six months of 2013, the average drop in the labor force for the nation as a whole was about 0.57 percent," he said. "North Carolina's drop in total labor force was higher, around 0.82 percent. Even if we attribute the entire difference to North Carolinians losing access to extended UI benefits and deciding to give up their job search, that would translate into about 12,000 people. More than twice as many previously unemployed North Carolinians obtained jobs during that same six-month period, according to the now-revised BLS data."

Major revisions to both the establishment and household data send a message to pundits of all political stripes, Hood said. "It's unwise to use preliminary data to make sweeping judgments about the impact of recent policy changes," Hood said. "Not only can the numbers change, they can change in ways that turn sweeping judgments into significant errors."

"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," he said.

For more information, please contact John Hood at (919) 828-3876 or jhood@johnlocke.org. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or mkokai@johnlocke.org.

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