The following report is an overview by Don Schunk, research economist at Coastal Carolina University, of employment/unemployment data for March 2009 released today by the South Carolina Employment Security Commission and the U.S. Bureau of Labor Statistics.
Highlights from March 2009 Data:
* South Carolina's unemployment rate in March rose to 11.4 percent, matching the highest recorded level from January 1983. Between February and March, the size of South Carolina's labor force fell by roughly 3,800 individuals. Meanwhile, the number of unemployed individuals increased by 10,200. The size of the state's labor force has fallen during two of the last three months. Housing market conditions have greatly reduced mobility in the U.S., likely leading to slower population growth via in-migration. Additionally, we are likely seeing more discouraged workers dropping out of the labor force. The sharp increase in unemployment given the labor force decline speaks to the size of job losses we are currently experiencing.
* Total employment in South Carolina is down 4.9 percent over the last 12 months. Between March 2008 and March 2009, South Carolina posted a net loss of 94,300 jobs. Now, between February 2009 and March 2009, the unadjusted count of jobs did increase by about 6,900. However, employment almost always increases for seasonal reasons in March. This year's March gain was smaller than usual, suggesting there was less seasonal hiring taking place during the early spring than normal. This indicates a further weakening of employment conditions in March.
* The Grand Strand of South Carolina posted jobless rate declines in March. Both Horry and Georgetown Counties saw lower unemployment rates in March compared with February. Again, however, it is important to recognize that unemployment always declines in March along the Grand Strand thanks to seasonal hiring. As with statewide job growth, the March jobless rate declines were smaller than usual, so on a seasonally adjusted basis, the Grand Strand's unemployment rates continued to rise in March. After adjusting for the seasonality of Horry County's jobless rate, for example, Horry's unemployment rate has climbed from 10.5 percent in January, to 11.4 percent in February, to 12.7 percent in March.
While the economy remains in a deep recession and continues to generate substantial uncertainty and anxiety, there have been scattered signs that the pace of decline for the national economy may be slowing. This is not to say that the recession itself is ending, but that the sharpest declines may be behind us. Ultimately, it is important to note that whether the economy will recover is not at question. Through a combination of regular cyclical economic forces and government monetary and fiscal policy, the economy will turn the corner. The important questions right now relate to the strength of the coming recovery. Will consumers return to their old ways and be willing (and able) to take on additional debt and reduce savings to finance consumption? Or, will consumers remain relatively thrifty for an extended period? The answers should come into focus over the coming quarters as we gauge developments in key indicators such as home sales and household savings and spending patterns. The developing trends will largely determine whether the economy will see a strong recovery or a sluggish one.
In the meantime, what do the current jobless statistics mean? High and rising unemployment rates play a crucial role. They not only provide an indication of how rough the economy is, but importantly they also portend continued weakness. Every month that the unemployment rate rises, we see the pool of income-earning workers -- those who will be at the front lines of boosting spending and therefore sparking a recovery -- shrink further.
Overall, in South Carolina specifically, I am currently projecting the state's jobless rate to rise throughout 2009, approaching 14 percent to 15 percent by the end of the year. The short-term future of South Carolina's economy is going to be dictated by a few key factors: consumer spending trends affecting the strength of tourism, exports and industrial production affecting the strength of manufacturing, and housing and commercial development affecting the strength of construction activities. Right now, I don't see enough strength on the horizon in any of these areas to avoid further deterioration for the state's labor markets.
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, email@example.com, 843-655-0995 or 843-349-2485.