Economist Schunk presents overview of S.C. labor market data for February
Overview of South Carolina's Labor Markets, February 2009 data
Highlights from February data:
* South Carolina's unemployment rate surged to 11 % in February. Unemployment in South Carolina is bearing down on its record high of 11.4% set in January 1983. Between January and February, the size of the state's labor force grew by 5,600. Meanwhile, the number of unemployed individuals increased by 15,100. There were several years, from 2003 through early 2008, when the state's jobless rate remained stubbornly high despite positive job growth. This was due to rapid growth in the state's labor force; we were adding jobs, but the number of people looking for those jobs was growing even more quickly.
Recent labor force growth continues to exert upward pressure on the state's jobless rate; however, the bulk of the pressure now comes from the fact that the state is losing jobs at nearly the fastest pace in history...
* Total employment in South Carolina is down 4.6% over the last 12 months; this is the fastest annual rate of job loss since May 1975. The number of jobs in South Carolina during February 2009 was 88,700 below February 2008's level, representing a 4.6% drop in jobs since last year. Between May 1974 and May 1975, the state posted a 5.1% decline in employment. In fact, we have been losing jobs at a rapid enough pace that we currently find total employment below the level reached during June 2000. At the end of the 1990s economic expansion. Since 2000, South Carolina's population has increased by nearly 500,000, and yet the number of jobs is essentially where it was in mid-2000.
Yes, South Carolina saw several years of positive job growth in the mid-2000s, but it is now clear that this period of economic growth from 2003 through early 2008 was not strong enough to generate sustainable gains for the state's economy. We continue to be faced with a substantial challenge as we deal with the long-term and ongoing declines in South Carolina's manufacturing base.
* Unemployment rates along the Grand Strand were essentially unchanged from January to February. Unemployment in Horry County was unchanged at 14.3%. In Georgetown, unemployment rose slightly from 12.9% to 13.1%. While this may seem like a positive, it is important to note that historically, unemployment on the Grand Strand typically falls between January and February thanks to the beginning of the hiring season. For example, since 1990, Horry County's jobless rate normally falls by an average of 1.2 percentage points between January and February. This year, Horry County's jobless rate was unchanged; this indicates a lack of normal seasonal hiring, suggesting further deterioration in the local economy.
I expect South Carolina's unemployment rate to continue to climb, likely throughout all of 2009 and into at least early 2010. Overall, the economy remains in a deep recession, and while there have been some scattered signs of improvement nationally (some positive surprises to durable goods orders, home sales and some stock market gains), there remain some fundamental obstacles working to hold back the economy. Home prices should continue to fall for the majority of this year, weakening labor markets will continue to weigh on household incomes and spending, and the financial system is not yet working as it should. I suspect we will continue to receive scattered reports that surprise to the upside, but the negative momentum built up behind the economy right now will take time to subside.
Additionally, during the last two recessions in South Carolina we saw that initial claims for unemployment insurance would reach a peak about two years prior to a peak in the unemployment rate itself. As of now, initial claims do not yet appear to have peaked, providing further evidence that we could be facing an extended period of rising unemployment rates.