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WNC economy continued to decline in January

BOONE—Western North Carolina’s economic downturn during 2008 continued into January with a 1.2 percent decline in economic activity reported in the Western North Carolina Economic Index compiled by the Center for Economic Research and Policy Analysis at Appalachian State University.

January marks the sixth consecutive month of declining activity. “Revised data from federal sources reveal greater declines in the regional economy during the fourth quarter of 2008 than previously reported,” said Todd Cherry, the director of the center and a professor of economics at Appalachian.

The regional economy shrank 2.9 percent last year.

“During the fourth quarter of 2008, the regional economy declined at a rate that is about twice that of the national economy. The start of 2009 hasn’t been any better. Regional employment fell more than 3 percent in January, which translates to more than 18,000 fewer jobs,” Cherry said.

More than half of the 25 counties in Western North Carolina now have unemployment rates of more than 10 percent and many have rates higher than 13 percent.

“Compare this to 12 months ago, when the highest unemployment rate in the region was under 8 percent,” Cherry said.

The region has lost more than 36,000 jobs during the past six months.

Twenty-four of the WNC regional counties lost jobs in January. Seasonally adjusted employment fell more than 5 percent in 15 counties. Graham, Swain and Watauga counties had the largest job losses at 29.37, 9.98 and 9.36 percent respectively.

Buncombe and Henderson counties had the lowest declines at 0.44 and 0.062 percent. Catawba County was the only county that experienced an increase in employment, although small at 0.04 percent.

Seasonally adjusted regional unemployment increased 1.2 points in January, registering 10.5 percent. The seasonally adjusted rate of unemployment for the region is 5.4 points higher than a year ago. The state unemployment rate increased 1.6 points to 9.7 in January. The national unemployment rate was 7.6 percent.

The seasonally adjusted unemployment rate in the region’s rural counties was 10.2 percent, a 1.7-point increase from December’s rate. Unemployment increased to 7.8 percent in Asheville and to 12.9 percent in the Hickory-Morganton-Lenoir area.

County level seasonally adjusted unemployment was higher in 24 of the 25 counties in January, continuing a trend recorded in December.

Fourteen of the 25 counties had unemployment rates of more than 10 percent and nine counties had rates greater than 12 percent. A year ago, the highest county-level unemployment rate in the region was in Graham County at 7.76 percent.

Cherokee, McDowell and Rutherford counties had the highest unemployment rates in January (14.67, 14.56 and 14.22 percent). Watauga, Buncombe and Madison counties had the lowest rates (7.44, 7.56 and 7.61 percent).

Graham, Mitchell and Caldwell counties had the largest increases in unemployment in January (3.48, 2.79 and 2.62 percent). Madison County was the only county in which unemployment rates declined.

Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, fell 87.4 percent in January. Initial claims fell 86.8 percent in Asheville and 86.3 percent in Hickory-Morganton-Lenoir.

The WNC Economic Index and Report provides a monthly account of economic conditions for the state’s 25 western counties. The report is a cooperative effort by the Center for Economic Research and Policy Analysis at Appalachian State University and AdvantageWest Economic Development Group.

It is compiled and written by Cherry, John W. Dawson from the Department of Economics in Appalachian’s Walker College of Business and Richard Crepeau from the university’s Department of Geography and Planning.

The Center for Economic Research and Policy Analysis is a multidisciplinary research unit at Appalachian that weeks to improve policy and decision making by producing high quality research and disseminating relevant information on current economic and policy issues.

For more information about the center, visit http://www.cerpa.appstate.edu/wncindex.php.

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