Jobs report delivered good news; experts weigh in on what it means for North Carolinians

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Friday, June 7, 2024
Employers added a vigorous 272,000 jobs in May; here's the NC impact
Some portions of the report gave economists some pause, notable findings from the household survey in which states the number of people who reported they were employed dropped by more than 400,000.

NORTH CAROLINA (WTVD) -- A better-than-expected jobs report on Friday displayed the resilient strength of the U.S. economy, even after years of high interest rates and stubborn inflation.

Employers hired 272,000 workers in May, blowing past economist expectations of 190,000 jobs added, U.S. Bureau of Labor Statistics data showed. The unemployment rate ticked up to 4%, reaching that level for the first time since January 2022.

According to the report, hiring exceeded the average number of jobs added each month over the previous year, and it accelerated notably from the 175,000 jobs added in April. Last month's strong job growth reflected the durability of America's consumer-driven economy. With the nation's households continuing their steady spending, many employers have had to keep hiring to meet their customer demand.

Some portions of the report gave economists some pause, notable findings from the household survey in which states the number of people who reported they were employed dropped by more than 400,000.

"There's also this category of 'discouraged', which means you're trying to find a job and you're striking out and you become discouraged and drop out. And that's increased by 100,000," said Campbell Harvey, a professor at the Duke Fuqua School of Business.

After falling slightly in the second quarter of last year, household debt has increased for three straight quarters.

"There has been an increase in people working part-time but not by choice," said Harvey.

While year-over-year wage growth of 4.1% topped inflation the overall labor participation rate dipped slightly.

One key factor being watched by both small businesses and individual borrowers is interest rates.

"52% say that the still high-interest rate imposed by the Feds is hurting their businesses. 46% of those people say the (Federal Reserve) needs to lower that rate by at least three points before they can even think about recovery," said Chuck Casto, Head of Research and News at Alignable.

Casto urged shoppers to utilize small businesses, who have felt a greater impact from economic pressures coming out of the pandemic.

"46% of small businesses across the country were unable to pay their rent in full and on time in May, which is three percentage points higher than April," said Casto, who noted North Carolina small businesses have fared better than the national rates, with 29% of small businesses reporting they were unable to make their full, on-time rental payments last month.

While TSA screened a single-day record number of travelers on Friday, May 24th, Harvey pointed to a separate spending metric that he believes merits attention.

"Retail sales, adjusted for inflation, have been flat over the last year. And retail sales are crucial for consumption spending, which is 70% of GDP," said Harvey.

30-year mortgage rates are at 6.99%, with Freddie Mac analysis noting it anticipates the rate to "modestly decline over the remainder of 2024."

"The job market is tightening, and this is consistent with the narrative that the economy is slowing and the (Federal Reserve) should get ahead of the economy rather than being a follower," said Harvey.

The Federal Reserve is set to meet next week; Thursday, the European Central Bank issued an interest rate cut for the first time since 2019.

Sectors that saw job growth included healthcare, hospitality, and government.

"We realize we're competing against private industry, and we're doing a better job in talking about local government is not only a job, but a place to build a career. And we know that a lot of those that are graduating now are looking for a place to make an impact," said Elaine Barnes, Wake County's Talent Acquisition and Compensation Division Manager.

Tomorrow, it will join other government agencies as part of a local government career expo at the McKimmon Center from 1:00 - 4:00.

"These are jobs that provide services to the county. Social services for example, serving our most vulnerable community and citizens. (It's) vital that we fill those jobs. Sheriff's office, law enforcement jobs, our jobs in environmental services, they all impact our communities, and it's critical that we fill those jobs," said Barnes, who added more than 2,000 people have registered to attend thus far.

In April, North Carolina's seasonally adjusted unemployment rate sat at 3.5%, below the national average.

"Currently I hear a lot of people are looking for a job," said Giuliana Ferreira, who lives in Raleigh.

Ferreira moved to North Carolina shortly before the pandemic and struggled to find a job after working extensively overseas.

"When you see like 100 people apply for a job and so many layoffs. I was like, 'what can (I) bring to stand out of 100 people," Ferreira shared.

She underwent training sessions with Dress for Success Triangle NC and eventually landed a contract role. She now is running a start-up social media marketing agency, Bananas in a Car, where she works with artists.

"Putting that brand online, talking with people, showing their art, that's something that I could help and it's fun," explained Ferreira, who is interested in hiring as her business grows.


Gas prices dropped eight cents last week, according to AAA. That's the largest weekly drop of the year, the agency said. The current national average of $3.48 is 17 cents less than a month ago and six cents less than a year ago, AAA says.

Overall, this could turn out a win for consumers as retail stores and fast food chains have also announced price slashes.

Target, Walmart and other chains have rolled out price cuts - some permanent, others temporary - with the stated aim of giving their customers some relief. The reductions, which mostly involve groceries, are getting introduced as inflation showed its first sign of easing this year but not enough for consumers who are struggling to pay for basic necessities as well as rent and car insurance.

Walgreens also joined price-cutting wars across the board, from snacks to toiletries and even Squishmallows, in an effort to lure back inflation-weary shoppers turned off by high prices.

Consumers also saw a big drop on some grocery prices in April--a trend that could continue.

Aldi's dropped prices on 250 grocery store items in May, stating the price drop with remain in place through Labor Day. The company says overall, it's $100 million in savings through Labor Day.