The following report is an overview by Don Schunk, research economist at Coastal Carolina University, of employment/unemployment data for January 2009 released today by the South Carolina Employment Security Commission and the U.S. Bureau of Labor Statistics.
Overview of South Carolina's Labor Markets, January 2009 Data
Highlights from January Data:
* South Carolina's unemployment rate soared to 10.4% in January from a revised 8.8% in December 2008. This was the highest unemployment rate for South Carolina since the spring of 1983, and ranks the state as the 2nd highest in the country, behind only Michigan at 11.6%. While this level of unemployment is stunning, the sheer speed of deterioration is perhaps most disconcerting. South Carolina's jobless rate increased 4.7 percentage points over the last twelve months. During the early 1980s, when state unemployment rose to a high of 11.4%, the jobless rate never increased by more than 3.5 percentage points during any twelve-month period.
Consistent state-level unemployment records only go back as far as 1976. Since that time, the highest recorded jobless rate for the state was 11.4% during January 1983. That record will unfortunately be eclipsed within a matter of months.
* Total employment in South Carolina is down 4.0% over the last 12 months. Between January 2008 and January 2009, the state has experienced a net loss of 76,100 jobs. The job losses over the past year have been increasingly widespread across industries as the economic weakness originally centered in housing has evolved quickly into one of the deepest recessions on record.
There is no silver lining in January's labor market data. South Carolina posted nearly record-high unemployment in January. Since then, the U.S. has already recorded another large increase in unemployment, from 7.6% in January to 8.1% in February, and South Carolina is certainly going to follow suit. Further, the overall economy continues to deteriorate further as consumers, businesses, and state and local governments pull back sharply on spending.
We are in the midst of a vicious recessionary cycle of negative feedback as rising unemployment saps household income and spending, leading to further declines in business output and spending, and further job losses. In the midst of this, we have substantial government intervention and tremendous uncertainty over the precise nature and ultimate impacts of these government actions. All of this is creating an atmosphere of extreme anxiety and uncertainty that will continue to cause the economy to slide. The state's economy is likely to remain in a recession throughout all of 2009, and unemployment will likely continue to rise well into 2010.
As recently as mid-February, I was personally projecting the state's unemployment rate to hit 11.5% by the end of this year, and I expected the sharpest pace of year-over-year job losses statewide to be about -3.1%. As ugly as these projections were, I now recognize they were too optimistic.
Don Schunk, Research Economist
BB&T Center for Economic and Community Development
E. Craig Wall Sr. College of Business Administration
Coastal Carolina University
For additional information, contact: Don Schunk, firstname.lastname@example.org, 843-655-0995 or 843-349-2485.