by Paige Terryberry
Senior Analyst for Fiscal Policy, John Locke Foundation
North Carolina’s June unemployment rate remained unchanged at 3.4% for the third consecutive month according to the latest release from the North Carolina Department of Commerce. The national rate also remains unchanged at 3.6%.
The state’s labor force, including employed individuals and unemployed individuals searching for work, grew to 5,101,791 persons in June, notably close to the January 2020 pre-pandemic level of 5,110,632.
North Carolina employers added 12,675 jobs over the month (less than half of the jobs added in May), with Education and Health Services and Professional and Business Services making the most gains.
Since June 2021, total private sector jobs in the state have increased by 160,800 or 4.2%. Government jobs have decreased by 8,800 or 1.2% over the year.
Dismal national trends raise concern about whether North Carolina will maintain this growth.
Moreover, diverging data trends raise questions about the direction of the labor market nationally.
The Wall Street Journal states, “The U.S. added workers at a strong pace over the past three months. It is also losing workers. The conflicting employment data come from two different surveys—one of employers and one of households—used to calculate employment, unemployment, and other key figures in the Labor Department’s monthly jobs report.”
The North Carolina Department of Commerce release uses both surveys. Analysts use a household survey for unemployment rates and a payroll survey for job numbers and industry information.
The payroll surveys nationally have shown job growth, while the household surveys have shown a decline over the same period. The payroll survey counts people on payroll from a survey of businesses. In contrast, the household survey is based on households and includes self-employed individuals and jobs not on traditional payrolls like babysitting or housekeeping. Someone with two jobs can be counted twice on the payroll survey but only once on the household survey.
If more people take an extra job to help counter inflation, this could be reflected in the positive payroll data, but it does not point to a healthy economy.
Moreover, inflation continues to surpass wage growth.
In North Carolina, according to the most recent data, wages declined 1.53% over the month (not seasonally adjusted) from $1,024.16 to $1,008.44. Over the past year, average private wages are up 4.76% in the state.
Now at an annualized rate of 9.1%, inflation overtakes these wage gains. Inflation is a tax on all Americans. But low-and middle-class households and those on fixed incomes are hit hardest. Savings, too, are devalued.
This month, North Carolina adopted budget adjustments for the new fiscal year. The budget included generous additions to the Rainy Day Fund and a $1 billion Stabilization and Inflation Reserve “to be used for costs associated with inflation and other measures necessary to stabilize the State economy.”
Reckless deficit spending and money printing in Washington caused today’s record inflation. Thankfully, fiscal conservatives in Raleigh have rolled up their sleeves to blunt future effects on the state.