Where are the jobs?
The stock market is booming. U.S. companies are posting record profits. The housing market is making a solid comeback.
But does it seem like the economy is really improving that much?
Not if you look at the unemployment rate in High Point and the Triad as a whole.
After hitting a four-year low in April, the city’s unemployment rate shot up to 9.5 percent in May. The state’s rate for the month was 8.9 percent — still the fifth-highest in the nation.
Experts say unemployment usually is the last economic condition to show improvement during a recovery from a recession. Nationally, unemployment has fallen from a high of 10 percent in October 2009 to 7.6 percent in May.
The state rate has dropped from a high of 11.2 percent in December 2009, while the city’s rate peaked at 12.1 percent in July 2010.
Don Jud, emeritus professor in the Bryan School of Business and Economics at the University of North Carolina at Greensboro, said if job growth continues as slowly as it has so far in the recovery, it will take another eight years for the Triad’s unemployment rate to reach pre-recession levels of 4.7 percent.
Jud said he believes uncertainty about what federal and state lawmakers may do concerning tax reform, regulation of businesses, government spending and other aspects of fiscal policy has a lot to do with persistent unemployment.
“All these things cause consumers and businesses, I think, to hold back, not to invest, not to spend. And that, in my view, is principally responsible for why we’ve had slow employment growth,” he said.
Some long-term unemployment probably stems from the lingering impact of the loss of traditional industries like furniture and textile manufacturing, said Mike McCully, associate professor of economics at High Point University.
“There are still probably a lot of what they call structurally unemployed people out there who had manufacturing skills, and they haven’t been retrained for the new jobs,” he said.
As the job market gets better, some people who had given up looking for work sometimes seek to re-enter the labor force and are counted among the unemployed, so the rate stays stuck, McCully said.
The Triad actually has done better than the rest of the nation in manufacturing job growth since the recovery began in July 2009, Jud said. Where the region falls behind is in other sectors, according to figures from Triad Business Index, a statistical compilation by Jud that measures economic activity.
For instance, growth in the financial sector has been relatively flat nationally, but is down 11.5 percent over the past four years in the region, he said. Education and health care are up 9 percent nationally, but only .4 percent in the Triad.
“I was surprised at this,” Jud said.
The region also lags the rest of the country in wholesale trade, retail trade and information services job growth. The service sector has been a bright spot, in which the region has outpaced the country as a whole in job creation, Jud said.
The future of unemployment at the local and state level appears very uncertain, according to McCully.
A cut in unemployment benefits enacted by state lawmakers took effect this month, which could be a drag on the recovery, since it tends to reduce consumer spending.
“What happens to future unemployment partly depends on, are employers going to create more jobs? Also, will new employers move into our state?” McCully said.