Economic decline slows in February

Western North Carolina's economy declined in February, but at .1 percent, it was the smallest decline since mid-2008, according to data compiled in the Western North Carolina Economic Index.

“It's not all bad news, which is an improvement," said Todd Cherry, a coauthor of the index. Cherry is the director of the Center for Economic Research & Policy Analysis at Appalachian State University and a professor in the Department of Economics.

“The regional economy continued to decline in February, but it was the smallest decline since the middle of last year," Cherry said. “Another bit of good news is that the regional economy also showed more strength than the statewide economy, which is noteworthy because the region has been lagging relative to the state during this recession."

Regional activity declined .5 percent in first two months of 2009, an improvement from the 2.4 percent decline experienced in the last two months of 2008.

“The numbers are mixed, but that is an improvement from the consistently bad news we have been seeing for the past eight months," Cherry said.

Declines in seasonally adjusted employment for WNC showed signs of leveling off in February. Regional employment declined .26 percent in February, the smallest decline since June 2008. North Carolina employment fell .4 percent in February.

Mapping the growth in employment over the preceding month provides a county-level account of job creation. Seasonally adjusted employment grew in 17 of the 25 WNC counties in February.

This marks an improvement from the previous month, in which 24 of the 25 counties experienced job losses. Wilkes and Avery counties had the largest net job gains (1.59 and 1.42 percent), while Caldwell and Alexander counties had the largest net losses (1.28 and 1.17 percent).

"Unemployment remains a growing problem," Cherry said. "The region's unemployment rate was 11.6 percent in February, with 15 of the 25 counties in the region have rates above 10 percent and four have rates above 15 percent. Those are striking numbers. Though there are some signs of leveling off, it is far too early to say we are on our way out of the woods."

The state unemployment rate increased 1 point to 10.7 percent. The national unemployment rate registered 8.1 percent in February, up .5 point from January.

The seasonally adjusted unemployment rate within the region's rural counties was 11.2 percent in February, up .5 point from the revised January rate. For the month, unemployment increased .8 point in Asheville to 8.6 percent and increased 2.4 points in Hickory-Morganton-Lenoir to 15.2 percent higher in 23 of the 25 WNC counties in February. Nineteen of the 25 counties have unemployment rates above 9 percent, 15 counties have rates more than 10 percent, and four counties have rates more than 15 percent.

Alexander, Caldwell and Rutherford counties have the highest unemployment rates (15.70, 15.29 and 15.13 percent). Watauga, Jackson and Buncombe counties have the lowest unemployment rates (7.15, 1.73 and 8.22 percent). Alexander and Caldwell had the largest increases in unemployment rates in February (2.82 and

2.1 points).

Wilkes and Yancey counties were the only counties in the region to experience declines in unemployment rates, down .17 points in Wilkes and down .09 point in Yancey. Specifically, Wilkes County's unemployment rate was 11.45 percent, down from 11.61 in January, but up from the 10.07 percent rate posted in December 2008. The rate in Wilkes County in February 2008 was 6.01 percent.

In Alleghany County, the unemployment rate was 11.9, up from 10.99 in January and 10.13 in December 2008. The unemployment rate in February 2008 was 5.51 percent.

Meanwhile, Ashe County's rate was 11.45 percent, up from 10.61 percent in January. Ashe's rate in February 2008 was 5.26 percent.

Seasonally adjusted initial claims for unemployment insurance in the region, a leading indicator of unemployment, increased 35.6 percent in February. Initial claims increased 35.8 percent in Asheville and increased 44.2 percent in Hickory-Morganton-Lenoir.

The WNC Index and Report 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.business.appstate.edu/economics/cerpa/wncindex.php. The WNC Index and Report is compiled and written by Cherry and John W. Dawson of the Department of Economics and Richard Crepeau of the Department of Geography and Planning. The WNC Index and Report is a cooperative effort by AdvantageWest-North Carolina and the Center for Economic Research and Policy Analysis at Appalachian State University.