Overview of South Carolina's Labor Markets
August 2007 data on employment and unemployment for South Carolina were released September 25 by the South Carolina Employment Security Commission and the U.S. Bureau of Labor Statistics.
South Carolina's unemployment rate fell from 5.9 percent in July to 5.6 percent in August. Month-to-month changes in unemployment rates can be volatile, however, and it is important to look at longer term trends to more accurately gauge recent movements. Over the last 12 months, South Carolina's jobless rate is down by 1.0 percentage point; only Tennessee has seen a larger unemployment rate drop since August 2006. This significant decline in South Carolina's jobless rate has come at a time when the national jobless rate has generally been holding steady. The gap between South Carolina and the U.S. in terms of unemployment is continuing to close.
South Carolina's job growth remains strong despite negative headwinds. Between July 2007 and August 2007, South Carolina posted an increase of 9,200 jobs. These job gains were spread across most major industries. Perhaps most notable is that construction sector employment is holding steady despite the downturn in new home construction. Part of the explanation for this is that many areas of the state continue to see high levels of business construction, helping to offset the downturn in housing. Over the last 12 months, the state has added 35,000 new jobs, representing job growth of 1.8 percent. South Carolina is outpacing the national economy. Nationwide, jobs increased by 1.1 percent over the last 12 months. While the housing slump in South Carolina is certainly dampening economic growth, it does not appear to be having as substantial an impact as it is at the national level.
Regionally, there are some changes in terms of job growth trends. There are some regional job growth developments worth watching. The pace of total job growth appears to have slowed in the Columbia and Myrtle Beach areas, while the rate of new job growth appears to be picking up most notably in the Greenville and Florence areas. These possible trends will be watched in the coming months.
The current economic outlook has grown in uncertainty, but is generally optimistic. The depth and impact of the housing slump and credit market problems continues to cause heightened uncertainty for the national, state and local economies. We have been hearing the 'R' word thrown around more often recently (as in 'recession'). I think the key point to recognize is that while the chances of a recession have probably been rising in recent months, I think the most likely scenario has the U.S., South Carolina, and most local economies continuing to expand into 2008. Part of the reason for this is the fact that, despite some domestic economic problems, the global economy is performing well, and we are finding ourselves in a position where even if the domestic economy stumbles, other countries are able to pick up some of the slack. Also, recent actions by the Federal Reserve are working to: (1) infuse credit markets with more liquidity, and (2) send a clear signal that the Fed is concerned about economic weakness and willing to act as necessary to achieve both stable economic growth and low inflation.