The Triangle jobless rate dropped sharply in August to its lowest point in nearly five years, as the region’s labor market showed some welcome signs of activity.
The unemployment rate was 6.6 percent in August, down from 7.2 percent in July, according to data released Wednesday by the N.C. Department of Commerce and seasonally adjusted by Wells Fargo.
That’s the lowest the jobless rate has been in the Triangle since November 2008.
Economists have been concerned that much of the recent declines in the rate have been driven in part by people exiting the labor market.
But the August data were more promising. The number of people employed in the Triangle increased 3,694 over the month while the number of unemployed declined by 4,857, according to a survey of households.
“It would be nice to see this trend continue,” said James Kleckley, an economist at East Carolina University. “It’s good news this month. Whether or not it will continue we’ll just have to wait and see.”
Mark Vitner, an economist with Wells Fargo, said most of the state’s metro areas showed significant drops in their jobless rates in August. The Greensboro area, for example, saw its jobless rate fall from 9.1 percent to 8.4 percent, while the Charlotte area declined from 8.8 percent to 8.1 percent.
The falling rates in North Carolina coincided with a disappointing report on national job growth from payroll processing firm ADP. The private sector added 166,000 net new jobs last month and significantly revised down its estimate for August, ADP said Wednesday. The figure was below analysts’ projections that businesses added 180,000 jobs in September.
September’s job growth was an improvement from the previous month, but only because ADP revised its August figure down to 159,000 from the initially reported 176,000.
Vitner believes that the Bureau of Labor Statistics data showing job gains, which are derived from surveys of employers, likely aren’t capturing all the economic activity happening in a place like the Triangle, where many new businesses are being started.
“Actual job growth has been a good bit stronger than what’s been reported,” he said.
Vitner estimates that the Triangle is likely on pace to add about 30,000 jobs this year, which would be an annual growth rate of more than 3 percent.
“The improvement in the unemployment rate is suggesting that the Triangle’s economy is gaining momentum,” Vitner said. “We’ve seen demand for office and industrial space increase. Home sales have increased. Prices are increasing. Wages are increasing. All of that points to an economy that is doing better, not worse.”
As for the economic danger posed by the federal government shutdown, Vitner said at the moment he’s not concerned about it becoming a major drag on local economies such as the Triangle’s.
“If we’re still talking about this at Halloween, then I’ll be a little worried about it,” he said.