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Thursday, August 28, 2014

Local unemployment figures - confusing as they may be - signal good things

Posted By on Thu, Aug 28, 2014 at 1:14 PM

If you’re walking around today feeling just a tad more befuddled than you might consider normal, blame the completely confusing and divergent set of headlines that could have crossed your desk this morning.

Here’s one from today’s Charlotte Observer: “Mecklenburg’s July jobless rate falls to 7 percent.” No big shock there, unless you saw a headline from today’s Charlotte Business Journal: “Charlotte-area jobless rate rises to 6.8%.”

Say what? Which is it? Did the jobless rate fall to 7 percent, or rise to 6.8 percent? And, whatever the correct number is, would that be a good thing or not? Well, relax. We’ve got you covered - and can actually deliver some pretty good news.

Notwithstanding the Observer’s headline, which had not been corrected online as of late Thursday morning, Mecklenburg County’s unemployment rate actually rose to 7 percent. The Charlotte “metro” area - Charlotte, Gastonia and Rock Hill - saw its rate tick up to 6.8 percent, from both May and June’s 6.5 percent. Both figures are major improvements from the same time period a year ago, when Mecklenburg County’s rate was 8.6 percent, and the Charlotte metro rate was 8.5 percent. The percentages reflect a net increase in the area of almost 26,000 jobs over the past year, which most local analysts, including Wells Fargo’s senior economist Mark Vitner, consider “a healthy improvement.”

Just how much of an improvement? Vitner is cautious about jumping to conclusions from the limited available data, which has substantial margins of error. But when asked to characterize how he thinks things are going around here a half decade after the worst of the recession, Vitner deferred to his 8-year-old child, who said this morning, “There sure are a lot of cranes everywhere” (meaning Uptown). “Of course," Vitner told me, “they’re all building new apartment complexes.”

The news appears to be encouraging, strengthened later this morning with the announcement from the U.S. Commerce Department that the nation’s overall economy grew at a faster rate than what was expected in the second quarter of the year, from April to June, at a brisk annual rate of 4.2 percent. This after a dismal first half of the year in which the GDP declined, mostly because of the effects of a harsh winter that affected consumer spending and factory production.

And while it’s difficult, again, to extrapolate much from one month’s numbers which are not seasonally adjusted, the fact that the area’s overall unemployment rate has dropped so significantly when compared to the same time last year is even more impressive when you factor in the area’s steadily increasing population, with most new transplants being on the younger end of the spectrum. And the more people who move here, the tougher it is to bring down the unemployment rate.

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