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Reality Check

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Economic signals are mixed

Western North Carolina's economy grew .5 percent in February, despite a lack of accompanying job growth. According to data in the Western North Carolina Economic Index compiled at Appalachian State University, the economy grew for two consecutive months—the first time back-to-back growth has occurred since 2007—but job growth remains flat.

"The latest numbers provide some hope that the region may not tip into a recession; however, we are still on the tipping point, said Todd Cherry, a co-author of the index.

"On the down side, revised figures from federal sources indicate the regional economy finished last year even weaker than previously reported, but, on the upside, the start of 2008 is better than expected," said Cherry, who is a professor in the Department of Economics at Appalachian.

According to the index, seasonally adjusted employment for Western North Carolina remained essentially unchanged in February, decreasing .04 percent.

"Job growth in the region has been essentially non-existent for more than a year, but this is not unique to the region," Cherry said. "Statewide job growth during this period has also been flat."

Seventeen of the region's 25 counties lost jobs in February. Alleghany and Macon counties experienced the largest job losses, while Jackson and Swain counties had the largest employment gains.

The adjusted rate of unemployment for the region decreased .1 percentage point to 5.1 in February. For the month, the state unemployment rate increased .1 point to 5 points. The national unemployment rate decreased .1 point to 4.8.

The seasonally adjusted unemployment rate within the region's rural counties was 5.3 percent in February, up .1 percentage point from January. In the region's metro areas, unemployment rates decreased .1 point to 6.3 in the Hickory-Morganton-Lenoir area and remained unchanged at 4 in Asheville.

County-level adjusted unemployment rates increased in 13 of the 25 WNC counties in February. Wilkes, Transylvania and Macon counties had the largest increase in unemployment rates (.66, .3 and .24 point respectively) in February, while Graham, Caldwell and Clay counties had the largest declines in unemployment rates (.78, .63 and .39 point).

Twenty-one of the 25 counties had higher unemployment rates than 12 months ago. Rutherford and Caldwell counties had the largest declines in unemployment rates since February 2007. Cherokee and Burke counties have had the largest increases in unemployment rates over the past 12 months.

Here in Alleghany, the unemployment rate was 5.41 percent in February, up from 5.3 percent in January and 4.81 percent in February 2007.

Unemployment also increased in February in Alleghany's neighboring counties, with Ashe county posting a 5.4 percent rate, up from 5.2 percent in January and 5.22 percent in February 2007 and Wilkes County posting a 6.24 percent rate, up from 5.57 percent in January and 5.09 in February 2007.

Alleghany ranked 13 of the 25 county region for unemploymentdata, while Ashe ranked 12 and Wilkes ranked 20.

Watauga County retained the lowest unemployment overall with the No. 1 rank with 3.52 percent unemployment, up slightly from 3.47 percent in January and 3.45 percent in February 2007. Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, increased 1.9 percent in February. Initial claims decreased 2.5 percent in Asheville, but increased 5.5 percent in Hickory-Morganton-Lenoir.

The WNC Index and Report, which tracks the level of economic activity in 25 western North Carolina counties, provides a monthly account of economic conditions for western North Carolina. It typically is released the fifth week following each month.

The WNC Index is compiled and written by Cherry, the Harlan E. Boyles Professor in Appalachian's Walker College of Business and a Faculty Fellow at the Institute of Emerging Issues at N.C. University, John W. Dawson of Appalachian's Department of Economics and Richard Crepeau of the Department of Geography and Planning. It is a cooperative effort by AdvantageWest-North Carolina, and Appalachian State University's Walker College of Business and Appalachian Regional Development Institute.