RALEIGH – North Carolina’s unemployment rate dropped to 3.4% in April 2022, when seasonally-adjusted. That’s dropped by 0.1% from the prior month’s revised rate, according to new data from the North Carolina Department of Commerce.
Even with tens of thousands of open roles across the state, and the state’s “quit rate” remaining high, economist Michael Walden, Ph.D., cautions those who are currently employed from taking the risk of switching employers due to current economic conditions.
“My practical advice to those in the job market is to be careful about leaving an existing job for another job that is not certain,” Walden told WRAL TechWire today. “During the last year, job seekers have been in control—that may soon be ending.”
Behind the numbers
According to the North Carolina Department of Commerce, April’s unemployment rate has decreased by 1.7 percentage points compared to a year ago.
That means that the total number of employed people in North Carolina has increased by more than 200,000 workers. There are 4,883,507 workers in North Carolina, according to the latest report.
While the leisure and hospitality industry brought in 4,200 additional workers, there are still significant challenges in this sector of the state’s economy.
Of all sectors, professional and business service roles increased the most in April, jumping up by 5,500 workers for the month.
But 5,900 fewer workers are in the construction industry than in March, the report found. That follows a national trend of a decreasing number of construction workers that could, in part, be tied to increasing interest rates and increasing mortgage interest rates, Dr. Gerald Cohen, chief economist of the Kenan Institute noted earlier this month.
Still, median home sale prices are rising, and so are mortgage interest rates, so those considering buying a home may wish to act soon, WRAL TechWire reported yesterday.
The latest report is a positive sign for North Carolina’s economy, said Walden. Not only were the total number of jobs higher than the prior month and prior year, the jobless rate decreased.
Importantly, said Walden, North Carolina’s labor force participation rate increased.
“The labor force participation rate is significant because it is a measure of the labor shortage,” said Walden. “The rise in the rate suggests the overall labor shortage is easing.”
But as the Federal Reserve continues to take action to curtail inflation, economic growth could slow. Already, there are increasing concerns about slipping into a recession. John Connaughton, professor of financial economics at the University of North Carolina at Charlotte, gave even odds during a virtual economic forecast held on Thursday.
While Connaughton noted that he anticipated the Federal Reserve to continue to take action to curtail inflation, even if everything were to go exactly right for the remainder of 2022, we’d still see an inflation rate of between 6% and 7%.
“The faster the Fed moves and the higher it raises its key interest rate, the more that economic growth will slow and the more modest that job growth will be,” said Walden.
But the Fed could take strong action, said Walden. “My own view is that the Fed will need to significantly raise its key interest rate—from 1% currently—to at least as high as 5%,” said Walden, “In order to move the inflation rate to under 5%. ”
Doing so would put the odds of a recession by year’s end at 1 in 3, Walden said. “The Federal Reserve’s anti-inflation policy will be center stage for the remainder of the year.”
Whatever actions the Fed does take, said Walden, “will be a major determinant to whether the job market continues to improve, of if there will be a pause in this improvement.”
Job-seekers, especially those seeking entry-level jobs, said Walden, may benefit from taking the first good offer, rather than holding out for a great one.