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Regional Economy Continues to Improve

BOONE -Western North Carolina’s economy continued to show signs of improvement in April, according to data compiled in the Western North Carolina Economic Index.

” The regional economy maintained a solid positive trend in April,” said Todd Cherry, an author of the report compiled at Appalachian State University. Cherry is the Harlan E. Boyles Professor in Appalachian’s Walker College of Business. “While uneven conditions exist within the region, the overall performance continues to be strong.”

The index, which tracks economic activity in 25 counties, increased 0.2 percent to 116.6 in April. Economic activity in the region has increased 11 consecutive months. The index indicates that regional economic activity has grown 4.7 percent over the previous 12 months.

Seasonally adjusted employment for the region and state had modest gains in April. WNC employment increased by 0.1 percent while state employment increased by 0.2 percent. The region has experienced job growth in seven of the last eight months.

Mapping the growth in employment over the preceding month provides a county-level account of job creation. Nine of the 25 counties in WNC experienced job growth in April. Graham and Jackson counties had the largest gains in employment. Job losses for the month were concentrated in the northwest area of the region.

While the positive job growth is encouraging, the labor market remains volatile, according to Cherry. “The labor market remains the big issue,” he said. “The national recession ended in the fourth quarter of 2001, but jobs were extremely slow to follow the increased economic activity of the recovery. The past eight months provide hope the labor market is finally recovering. The region gained jobs again in April, but less than expected. And recent layoff announcements from the furniture industry remind us things are still uncertain.”

The seasonally adjusted rate of unemployment for the region increased 0.1 percentage points in April to 5.5 percent while the adjusted rate for the state increased 0.1 points to 5.3 percent. The national unemployment rate remained unchanged at 5.2 percent.

The seasonally adjusted unemployment rate within the region’s rural counties increased 0.1 percentage points to 5.7 percent in April. For the region’s metro areas, seasonally adjusted unemployment rates increased 0.3 percentage points to 4.3 percent for Asheville and decreased 0.1 percentage points to 6.3 percent for Hickory-Morganton-Lenoir.

The county-level seasonally adjusted unemployment rate increased in 17 of the 25 WNC counties in April.

“The simultaneous increase in employment and unemployment rates may be a positive sign because previously discouraged workers may be returning to the labor market due to better job prospects,” Cherry said.

Rutherford, Mitchell and McDowell counties had the highest unemployment rates in April at 9.31, 8.16 and 7.14 respectively. Watauga, Clay and Jackson counties had the lowest rates at 3.05, 3.65 and 3.87 respectively.

Graham, Ashe and Cherokee counties had the largest declines in unemployment in April, while Jackson, Swain and Macon counties had the largest increases.

Seasonally adjusted initial claims for unemployment insurance, a leading indicator of unemployment, decreased 18.1 percent across the region in April. For the metro areas, initial claims during the month decreased 13.7 percent in Asheville and decreased 19.8 percent in Hickory-Morganton-Lenoir.

The WNC Economic Index and Report provides a monthly account of economic conditions for Western North Carolina. It typically is released the fifth week following the end of each month.

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The WNC Economic Index and Report is a cooperative effort by AdvantageWest-North Carolina, and Appalachian State University’s Walker College of Business and Appalachian Regional Development Institute. Cherry is assisted by co-authors John Dawson of the Walker College of Business and College of Arts and Sciences professor Rich Crepeau.