June 2009 Unemployment Rate

The local area unemployment rates were released today by the Employment Security Commission of NC. The unadjusted rate for Edgecombe County was 16.8 percent. However, the seasonally adjusted unemployment rate (SAUR) was 16.0. The SAUR is 0.3 percent higher than last month and 6.0 percent higher than was found in June 2008.

Seasonal adjustment removes the seasonal variations in the data, leaving fluctuations that are the result of the economic (structural and cyclical) changes in the economy. The US and North Carolina rates are seasonally adjusted by the US Department of Labor, while the county rates are seasonally adjusted by the ECU Bureau of Business Research BBR). The BBR adjustments are undertaken so that we can effectively compare the local rates to the state and national published rates. Plus, the seasonal adjustment process enables you to compare the rate from month to month.

All the North Carolina substate unemployment rates are available at the BBR web site. (http://www.ecu.edu/cs-bus/SAUR.cfm ). Unless you know the names of the North Carolina counties, it might be hard to make sense of the data. At the top of the list is Orange County (6.1 percent), which contains the City of Chapel Hill (and a UNC university with the same name). In the middle of the pack is Mecklenburg, which houses the state’s largest city (Charlotte). Mecklenburg has suffered relatively more this recession than we have seen in the past, and is one of the reasons that the statewide rate is one of the highest in the nation. Toward the bottom you will find Edgecombe – and other mostly rural North Carolina counties. As has been mentioned, this is not unusual for North Carolina. The rural counties tend to have higher rates. Unfortunately, and as we find virtually everywhere else in the State, the level of the rates are much higher than “normal”.

One of the aspects to remember about the unemployment rate and the other labor force numbers (employment and unemployment) is that these are resident indicators. In other words, the Edgecombe County unemployment rate reflects only county residents, regardless of where they work. So, if these individuals commute to contiguous counties for jobs (such as Nash (City of Rocky Mount) or Pitt (City of Greenville)), their employment/employment characteristics are reflected in these totals. This measurement demonstrates the connectivity to other parts of the state – for if a plant in an adjacent county closes and that plant employs many Edgecombe County workers, the Edgecombe unemployment rate will rise. Conversely, if an Edgecombe County plant closes and all their workers live outside Edgecombe, the unemployment rate will not be affected at all.

While the Edgecombe rate climbed during June, the NC rate for June fell for the first time in many months. While this slight fall (from 11.1 percent to 11.0 percent) does not signal the end of the recession, it is positive news. I believe that the worst is over and the economy (national and state) will slowly begin to improve. And history suggests that the statewide economy and its larger cities will improve before we see positive results in the state’s (mostly) rural communities.