Author: Andrew Berger-Gross
Welcome to the November 2023 edition of NC Economy Watch: an update on what’s happening in the North Carolina economy and what it means for you, brought to you by the Labor & Economic Analysis Division (LEAD) of the NC Department of Commerce.
Our last edition of NC Economy Watch provided a general overview of recent layoff activity. In this edition, we take a closer look at layoffs in our state and nationwide. Layoffs have increased slightly across most sectors of the United States economy, most notably in the freight industry. While layoffs might be on the rise nationwide, they remain near a multi-decade low, and most people who lose work in North Carolina are quickly re-employed in our tight labor market.
A Closer Look at Recent Layoff Activity
There’s been a slight uptick in nationwide layoff activity over the past year, and recent high-profile plant closures in our state have intensified concerns about the potential for further job losses. We are often asked: what is the cause of these layoffs? Is it a blue-collar phenomenon, driven by a slowdown in the manufacturing and freight-moving sectors? Is it a white-collar phenomenon, driven by troubles in the technology and financial sectors? Or are there broader forces at play?
Data from the US Bureau of Labor Statistics shows the nationwide rise in layoffs over the past year has been particularly steep in the transportation, warehousing, and utilities sector [Figure 1]. However, a focus on any one sector risks missing the forest for the trees. These data indicate that most sectors of the national economy have seen at least a slight acceleration in layoff activity, including “white collar” sectors like information and professional and business services as well as “blue collar” sectors like manufacturing.
Figure 1
The nationwide increase in layoffs can be explained by the broad macroeconomic forces we’ve described in previous editions of NC Economy Watch. Trillions of dollars of federal government spending and low interest rates helped drive an economic boom earlier in the pandemic. Since then, federal government spending has slowed and the Federal Reserve has hiked interest rates, leading to a slowdown in the economy and a marginal softening in the labor market. While some sectors of the economy are more directly impacted than others, none are immune from these forces.
Despite the increase in layoffs, nationwide layoff rates are currently hovering near their lowest point in at least twenty years. The economy is slowing, but it’s still growing, and there’s no evidence thus far of a wave of mass layoffs that would signal an economic recession.
Furthermore, re-employment opportunities for laid-off workers in our state are relatively plentiful. Most North Carolina workers who lost their job in early 2023 returned to work within one quarter following their layoff date [Figure 2]. The job-finding prospects of laid-off workers aren’t quite as favorable as they were earlier in the pandemic, but conditions are currently much better than they were during and after the recessions of 2001 and 2007-2009, and they remain consistent with the high rates of re-employment we saw during the tight labor market that preceded the COVID-19 recession.
Figure 2
As of now, job openings still abound, and most employers appear very reluctant to let go of their workers. The tight labor market conditions we’re currently experiencing have lasted for years, persisting through a trade war with China, a global pandemic, decades-high price inflation, rising interest rates, and a regional banking crisis. This surplus of job openings might not last forever, so jobseekers should try to take advantage of the many opportunities available in our labor market while they’re still there for the taking.
For inquiries and requests, please contact:
Meihui Bodane, Assistant Secretary for Policy, Research and Strategy
NC Department of Commerce, Labor & Economic Analysis Division (LEAD)