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Despite gains, economic recovery remains rough in western North Carolina

BOONE—Western North Carolina’s economic activity increased 0.9 percent in August, the largest increase since July 2007. The increase follows three months of declines that totaled 0.6 percent, but as in past months, the Western North Carolina Economic Index paints a mixed picture of the region’s recovery from the recent recession.

“Even a typical recovery can be slow to generate significant job growth, so in this slow and bumpy recovery, job growth is not happening at the moment and we may be waiting some time before we begin seeing it,” said Dr. Todd Cherry, a co-author of the report and director of the Center for Economic Research and Policy Analysis at Appalachian State University.

The index, compiled at Appalachian, tracks the level of economic activity in 25 western North Carolina counties.

“While the index registered a large increase, the entire report gives mixed signals,” Cherry said. “The good news is that the mixed signals are an improvement from the last few months.  By avoiding another bad month, concerns of a downward trend are alleviated, at least for now.”

According to the index, seasonally adjusted employment for western North Carolina increased 0.19 percent in August, which follows two consecutive months of declines.  Statewide adjusted employment decreased 0.4 percent. “In recent history, it is a unique event to see regional employment increase while the state numbers fall,” Cherry said. “Too often, we see the region fall behind the state.”

Mapping the growth in employment over the preceding month provides a county-level account of job creation. Changes in seasonally adjusted county-level employment during the month were mixed across the region, falling in 15 of the 25 WNC counties. Yancey, Alleghany and Clay counties had the largest gains in employment (1.76, 0.78 and 0.57 percent). Watauga, Rutherford and Graham counties had the largest losses (0.72, 0.70 and 0.46 percent).

Seasonally adjusted WNC unemployment registered 10.6 percent in August—up 0.6 points from July. The state unemployment rate fell 0.1 points to 9.7 percent, while the national unemployment rate increased 0.1 points to 9.6 percent.

The seasonally adjusted unemployment rate within the region’s rural counties increased 0.6 points to 11.2 percent in August. In the region’s metro areas, unemployment increased 0.2 points in Asheville to 8.2 percent and increased 1.0 points in Hickory-Morganton-Lenoir to 12.8 percent.

“The lack of jobs and job creation remain a significant problem,” Cherry said. “Western North Carolina lost more than 50,000 jobs during the recession, which is about 8 percent of all jobs in the region.  We have seen some improvement, but we have a lot of ground to catch up.”

County-level seasonally adjusted unemployment increased in all 25 WNC counties, with an average increase of 0.5 points.

Caldwell, Watauga and Wilkes counties had the largest increases in unemployment rates (1.35, 1.05 and 0.82 points). Madison, Swain and Transylvania counties had the smallest increases in rates (0.04, 0.10 and 0.14 points.)

During the past 12 months, county-level unemployment in the WNC region has decreased in 22 of the 25 WNC counties. Cherokee County has experienced a 1.99 point decline in unemployment rates.

Henderson and Polk counties had the lowest unemployment rates in the region in August (8.00 and 8.15 pct). Sixteen of the 25 counties have unemployment rates over 10 percent.

Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, increased 21.2 percent in August. Initial claims increased 7.1 percent in Asheville and increased 25.5 percent in Hickory-Morganton-Lenoir.

The WNC Index is coauthored by John W. Dawson, an associate professor in the Walker College of Business’s Department of Economics, and Richard Crepeau, an associate professor in the College of Arts and Sciences’ Department of Geography and Planning.

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

The WNC Index and Report is a cooperative effort by AdvantageWest-North Carolina and Appalachian’s Center for Economic Research and Policy Analysis, and the Walker College of Business.

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