RALEIGH — The Triangle jobless rate fell in August as the region continued to produce solid private-sector job growth despite the continuing weakness of the nation’s economic recovery.
The unemployment rate for the area was 7.7 percent in August, down from 7.9 percent in July, according to figures released Friday by the N.C. Department of Commerce and seasonally adjusted by Wells Fargo in Charlotte. Raleigh’s rate fell from 7.7 percent to 7.6 percent, while Durham’s fell from 7.6 percent to 7.4 percent.
The Triangle added 3,600 jobs in August and has added 22,900 jobs over the past year. Although that level of job growth, about 3 percent, is below the historic norm for the region, it is better than most other areas of the country.
“In this rough environment the Triangle is doing relatively well,” said Wells Fargo economist Mark Vitner. “That’s one of the reasons why you’re seeing so many folks looking to expand in the Triangle – either opening up restaurants or opening up retail stores or building apartments.”
Vitner said the technology, life sciences and health care sectors continue to create jobs in the Triangle.
“While state and local governments are struggling ... it hasn’t offset all the strong growth that we’re seeing in the private sector,” he said.
The Triangle’s future economic performance is still closely tied to the overall health of the U.S. and global economy. The government recently revised down the economy’s GDP growth in the second quarter to an annual rate of 1.3 percent. Vitner said GDP growth is projected to be an annual rate of 1.7 percent in the current quarter and fall to 1.2 percent in the fourth quarter and 1 percent in the first quarter of next year.
“There’s just very little margin for error, and the weakness is mainly coming from the factory sector,” he said. “Businesses are putting off key investment and hiring decisions right now.”
Some of that may be the result of companies waiting to see who wins the presidential election and to see how Congress is going to deal with the fiscal cliff, the automatic federal spending cuts and tax increases scheduled to take place at the beginning of the year. Companies are also waiting to see how their bottom line will be affected by the recession in Europe and the slowdown in China, Vitner said.
The recent disappointing earnings report from economic bellwether FedEx has also raised fears that corporate earnings this quarter could reflect a larger economic slowdown.
“Any time a company’s earnings come under pressure they tend to tighten their belt, not just in the areas that are struggling but all across the company,” Vitner said. “It seems clear to me that tougher days are ahead.”