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WNC Economic Index remains unchanged; employment picture improves

BOONE–Economic activity in Western North Carolina remained unchanged in May according to the Western North Carolina Economic Index. The flat economic performance follows two months of sizable increases.

The index, which tracks the level of economic activity in 25 western North Carolina counties, was 121.8 in May–unchanged from April. Nearly half of the 1.3 percent increase in activity experienced in the past year occurred in the previous two months.

“The region experienced sizable increases in economic activity the prior two months, but the lack of movement in May reminds us that the economy remains somewhat weak,” according to Todd Cherry, one of the authors of the report and an associate professor of economics in Appalachian State University’s Walker College of Business. Cherry is assisted by co-authors John Dawson of the Walker College of Business and College of Arts and Sciences professor Rich Crepeau.

There was some good news in terms of the state’s employment numbers, according to Cherry. “While the index remained unchanged, the employment numbers reveal positive movement for the region. Job growth picked up in May and unemployment fell, an indication that the labor market is tightening.”

Seasonally adjusted employment for the region increased 0.3 percent in May, an increase in the 0.1 percent growth experienced in April. Sixteen of the 25 counties in the region experienced job growth in May.

The seasonally adjusted rate of unemployment for the WNC region was 6.5 percent in May. The rate decreased 0.4 percentage points from the revised 6.9 percent rate for April. The state unemployment rate decreased 0.3 percentage points to 6.1 in May, while the national unemployment rate increased 0.3 percentage points to 6.4.

Unemployment in the region’s metro areas fell in May. Asheville’s unemployment rate decreased 0.1 percentage points to 3.8 percent, and Hickory-Morganton-Lenoir’s rate decreased 0.4 percentage points to 8.5 percent.

The overall decrease in unemployment is reflected with 17 of the 25 counties in the region experiencing decreases in unemployment rates in May–up substantially from only three counties in April.

Disparities within the WNC region ranged from a low of 2.51 percent unemployment (Watauga) and a high of 12 percent (McDowell).

Ashe, Graham and Alleghany counties had the largest drops in unemployment rates in May, while McDowell, Rutherford and Cherokee counties had the largest increases in rates.

Regional consumer spending, as measured by seasonally adjusted retail sales, decreased 3 percent in April. Asheville experienced a 3.3 percent increase in spending during April, while Hickory-Morganton-Lenoir experienced an 8.1 percent decrease. National spending was unchanged during the month.

The WNC Index and Report provides a monthly account of economic conditions for western North Carolina. It typically is released the fifth week following each month. For more information, visit www.business.appstate.edu/wncindex.asp.

The WNC Index and Report is a cooperative effort by AdvantageWest-North Carolina, and Appalachian State University’s Walker College of Business and Appalachian Regional Development Institute.

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Contact: Todd L. Cherry (828) 262-6081