by Paige Terryberry
Senior Analyst for Fiscal Policy, John Locke Foundation
North Carolina’s unemployment rate increased in August for the first time since Covid-19, as we reported two weeks ago.
Today the North Carolina Department of Commerce released county-level unemployment data for the state, revealing an increase in unemployment rates for 98 of North Carolina’s counties. Two counties, Jackson and Watauga, remained unchanged.
Eighteen counties now have unemployment rates over 5%, up from 15 counties in July.
North Carolina continues to boast an unemployment rate below the national average. But within the state, unemployment varies substantially.
According to the release, “Edgecombe County had the highest unemployment rate at 7.9 percent while Buncombe, Swain, and Chatham Counties each had the lowest at 3.1 percent.”
This data is not seasonally adjusted, however, and therefore is subject to volatile, seasonal changes. For example, the seasonally adjusted unemployment rate for August is 3.5%, while the non-seasonally adjusted rate is 3.9%, up from 3.7% in July.
The state’s higher unemployment counties are concentrated in the northeast and southeast, away from urban centers.
Even so, each of the state’s 15 metropolitan statistical areas saw an increase in unemployment over the month. Rocky Mount saw the largest increase in unemployment, from 6.5% to 7.0%. Raleigh, which traditionally has one of the lowest unemployment rates, saw an increase of 0.2 percentage points over the month, from 3.1% to 3.3%.
After steady drops in unemployment since Covid, these economic indicators show a reverse in the trend of recovery in North Carolina. Abysmal national trends – a tanking stock market, 40-year high inflation, falling real wages and shrinking work hours, and a smaller labor force – indicate the overall economy is running out of steam.
Fortunately, conservative leadership in the General Assembly took fiscally responsible measures to account for inflation and a looming recession in the latest state budget. They set aside $1.6 billion to the Savings Reserve, or Rainy Day fund, in Fiscal Year 2022-23, bringing the total Rainy Day Fund Balance to $4.75 billion by the end of the biennium. Additionally, they set aside $1 billion for a newly created Stabilization and Inflation Reserve, bringing total reserve funds to $9.1 billion.
Fiscal sanity at the state level will allow North Carolina to weather a downturn without drawing on necessary state tax revenue, entering a vicious tax-and-spend cycle, or bargaining with the wasteful politicians in Washington for federal assistance.