Donate to Hurricane Recovery

Economy

State Unemployment Rates

The unemployment rate in North Carolina remained consistent in the last half of 2017, falling to 4.4% in the third quarter of 2017 and rising slightly to 4.5% in the fourth quarter. Although North Carolina's unemployment rate continues to be higher than most of its neighbors (South Carolina, Tennessee, and Virginia), unemployment rates across the entire nation are low and, in most cases, below pre-recession levels. Broader measures of unemployment, which include so-called "marginally attached" workers and part-time workers who would rather work full time, have also reached pre-recession lows. Tighter labor market conditions have spurred wage growth. North Carolina and most of its neighboring states reached pre-recession per capita wage and salary levels in 2016, and growth has continued throughout 2017.

Employment Trends chart

 

State Job Growth by Industry

North Carolina's economy continued to generate jobs for the eighth straight year. Total nonfarm payroll increased by 1.6% in 2017 – slightly lower than the average percentage increase over the past eight years. Job creation was lower compared to 2016, but remained concentrated in service-providing industries. Professional and Business Services remained the strongest creator of job growth, accounting for 31% of new jobs. Construction and Manufacturing were the two sectors hardest hit by the Great Recession; employment in these sectors remains well below pre-recession levels, as well as below the national recovery trend, despite an uptick in manufacturing employment during 2017. Due to differences in prevailing wages across industries, which industries are experiencing the most job growth affects growth in state income and sales taxes.

Job Growth Continues chart

While labor market conditions remain quite strong for North Carolina as a whole, recovery from the recession has been unevenly felt across the state. Because service-providing industries have driven job growth since the Great Recession, areas that had larger concentrations of harder hit goods-producing industries have not fared as well in terms of job creation. Rocky Mount had a larger concentration of manufacturing jobs that have not recovered, while Goldsboro experienced a brief resurgence in goods-producing industries in 2012 before those jobs also went away. While the Triad was also hit particularly hard by the Great Recession and job growth remains slightly below pre-recession levels, employment growth has been slowly recovering.

Job Growth Strongest chart

Housing Construction

Like most states, North Carolina experienced a dramatic decline in construction of new housing after the nationwide housing bubble burst in 2006 and 2007. The decline in construction contributed directly and indirectly to the rapid decline in sales tax revenues during the most recent recession. Although the state’s housing market has gradually improved over the course of the last five years, helping to boost sales tax collections, construction levels remain far below the levels of the late 1990s through the mid-2000s. Demographic trends, including lower population growth and migration, an aging population, and delayed household formation by young adults, will likely keep housing construction from fully recovering to pre-recession levels. However, the demand for new homes in many of North Carolina’s major metropolitan areas is likely to sustain the gradual rise in new-home construction for the next several years.

Housing Construction chart

Notes: This article was current as of May 10, 2018. More information can be obtained from the following links: Unemployment Rates, State and Local Job Growth by Industry