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WNC Economy Grows at Slower Pace Amid Job Losses

BOONE – Slowed by a decline in employment, Western North Carolina’s economy posted a meager 0.14 percent gain in the month of February, according to the WNC Economic Index and Report.

” Western North Carolina’s economic growth continues but at a slower pace,” said Todd Cherry, an author of the report compiled at Appalachian State University. “The regional economy has grown at an annual rate of 2.4 percent during the first two months of 2005, down from the high growth we experienced during the fourth quarter of last year.”

Cherry is the Harlan E. Boyles Professor in Appalachian’s Walker College of Business.

” Recent job growth has indicated the employment situation may be improving in Western North Carolina, but job losses in February raise old concerns regarding the regional labor market,” said Cherry.

The slower growth recorded in February embodies the loss of over 4,000 jobs in the region, a 0.7 percent decline in seasonally adjusted employment. The February drop offsets the promising employment gains achieved in January.

Twenty-three of the 25 counties in Western North Carolina recorded job losses in February. Only Graham and Wilkes counties had job growth for the month. Alleghany, Burke, Jackson and Transylvania counties had the largest job losses.

The seasonally adjusted rate of unemployment for the WNC region decreased 0.5 percentage points in February to 5.6 percent. The adjusted state unemployment rate increased 0.4 percentage points to 5.4 in February, while the national rate increased 0.2 points to 5.4 percent.

The seasonally adjusted unemployment rate within the region’s rural counties increased 0.5 percentage points to 5.8 percent in February. For the region’s metro areas, seasonally adjusted unemployment rates increased 0.3 percentage points to 4.2 percent for Asheville and increased 0.6 percentage points to 6.8 percent for Hickory.

The county-level seasonally adjusted unemployment rate increased across the WNC region in February. Twenty-two of the 25 WNC counties had unemployment rates increase during the month.

Only Graham, Rutherford and Swain counties had unemployment rates fall in February. Yancey, Mitchell and McDowell counties had the largest increases in monthly unemployment rates.

Eleven counties had unemployment rates below 5.0 percent, while four counties had rates exceed 7.5 percent. Watauga County had the lowest unemployment rate (2.97), and Rutherford County had the highest (8.70).

Fifteen of the 25 WNC counties had lower unemployment rates than 12 months ago. Rutherford County showed the biggest decline over the past 12 months (3.22 percentage points). Cherokee County had the largest increase with 1.42 percentage points.

Seasonally adjusted initial claims for unemployment insurance, a leading indicator of unemployment, increased 5.9 percent across the region in February. For the metro areas, initial claims during the month decreased 1.8 percent in Asheville and increased 13.7 percent in Hickory.

The WNC Economic Index and Report provides a monthly account of economic conditions for Western North Carolina. It typically is released the fifth week following each month.

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The WNC Economic 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. Cherry is assisted by co-authors John Dawson of the Walker College of Business and College of Arts and Sciences professor Rich Crepeau.