Raleigh, October 20, 2023 - The September labor market report for North Carolina has revealed a mix of positive outcomes and potential concerns, according to N.C. State economist, Dr. Mike Walden. While the state experienced overall job growth and an expansion in its labor force, there were notable losses in certain sectors and a slight increase in the unemployment rate.

According to the report released by the N.C. Department of Commerce, North Carolina's seasonally adjusted unemployment rate for September 2023 was 3.4 percent, up by 0.1 of a percentage point from the revised rate in August. The rise in unemployment was accompanied by an increase of 3,100 unemployed workers.

Dr. Walden expressed surprise at the robust growth in national job numbers, as the net increase in payroll jobs reached an astonishing 336,000. However, North Carolina missed out on this surge, with only a 10,000 increase in non-farm jobs, which was 60% lower than August's gains.

The labor force in North Carolina expanded by 18,000, contributing to a slight rise in the labor force participation rate to 60.9%. Notably, several sectors experienced strong job growth, including trade/transportation/utilities, education/health, and professional services. However, the manufacturing sector faced a loss of 900 jobs, and the leisure/hospitality industry recorded a decline in employment by 1,600 jobs.

Dr. Walden highlighted concerns over the negative impact of shrinking manufacturing jobs, as they often indicate changes in the overall economy. The decrease in leisure/hospitality jobs is also significant, given that this sector had previously reported substantial gains in recent months.

Although the September unemployment rate remained relatively low, the slight increase from August's 3.3% rate implies that more individuals became unemployed. These trends have raised questions about whether North Carolina may be heading toward a recession with potential layoffs.

However, Dr. Walden suggested that the current data and trends indicate a slowdown in the economy rather than a full-blown deterioration. He forecasts a continuation of gains but at a slower pace. Manufacturing jobs, in particular, may become more vulnerable, and the construction sector may also face challenges. Meanwhile, the tech industry is undergoing a transitional phase as it adjusts its employment goals following rapid job expansion during the pandemic.

In other economic news, September's inflation numbers were described as "good, bad, and uncertain" according to analysis from NC State economist.

As North Carolina's labor market continues to evolve, economists and policymakers will closely monitor these warning signals and employ strategies to stimulate growth and support job stability in the state.