4-30-2020 – Report shows tip of economic iceberg

Posted on: April 30th, 2020 by admin

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April 30, 2020

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By Guy Lucas

GUYLUCAS@NEWSTOPICNEWS.COM

Apr 29, 2020 1:16 PM

 

A new state report is the first to reflect the early economic effects of coronavirus-related business closures, but it only scratches the surface of the recession that was just beginning to unfold.

 

Caldwell County’s unemployment rate jumped by 0.6 of a percentage point to 4.2 percent in March, the N.C. Labor and Economic Analysis Division reported.

 

Next month’s report on April unemployment rates is sure to be worse, said Deborah Murray, the executive director of the Caldwell County Economic Development Commission.

 

“Since unemployment insurance reports are generally collected between the 12th and 15th of each month, the March report shows the drops in employment recorded only through the mid-portion of the month,” she said. “We expect subsequent reports to show increased unemployment through April and into May and perhaps further, depending on the duration of the crisis.”

 

Also on Wednesday the U.S. Department of Commerce said the national economy shrank at a 4.8% annual rate in the first three months of the year — the first quarterly contraction since 2014 and the largest since the Great Recession, when the economy shrank by 8.4% in the fourth quarter of 2008. The first quarter retreat was a sharp reversal from the 2.1% growth rate at the end of 2019.

 

The local unemployment rate increased in 97 of the state’s 100 counties – including Burke’s by 0.6 percentage point to 4.1 percent, and Catawba’s by 0.5 to 3.9 percent – in March, the month when Gov. Roy Cooper first ordered bars to close and restaurants to halt dine-in service. He did not order most businesses to close and residents to remain home as much as possible until March 30, a period that will not be covered until the April unemployment report comes out next month.

 

The Commerce Department said that similar stay-at-home orders across the country led to rapid changes in demand as businesses switched to remote work or closed and consumers cut or changed their spending.

 

Consumer spending, which accounts for about 70% of GDP, dropped at a 7.6% rate in the first quarter, the biggest decline since 1980.

 

More than 26 million people have filed unemployment claims in recent weeks.

 

Murray said that Caldwell and the region were in a good position relative to the rest of the state when the economic crisis began. The county’s March unemployment rate was tied for 33rd best in the state.

 

And she said some local employers continue to hire more workers.

 

“I am very thankful for those companies that have maintained employment and kept so many working,” she said. “I am also grateful for the unemployment funds and the stimulus funds that will help to offset the financial hardships caused by COVID-19 and felt by Caldwell families and businesses.”

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