RALEIGH – North Carolina’s economy will be wracked by 250,000 job losses – some 70,000 more than the entire total reported across the state in January – by the expanding devastation being wreaked by the coronavirus, according to a new estimate from NC State economist Dr. Mike Walden.
“Economists have been increasing their estimates of commercial and employment damage,” Walden told WRAL TechWire early Monday.
“The increase in job losses could top 250,000 in North Carolina.”
Nationally, some experts have said unemployment will increase by millions.
North Carolina’s unemployment rate in January was 3.6 percent with nearly 5 million people employed and 184,881 unemployed. The state Department of Commerce noted that the January figures reflected an increase of nearly 85,000 jobs from a year earlier while the ranks of the jobless fell more than 18,000.
GE Aviation, which employs hundreds in Durham, is laying off 10% of workforce
February figures are due out March 27.
‘More dire forecast’
Walden recently estimated that the state’s job losses will be “five figures.” He raised his estimate as the coronavirus drilled its way deeper into the US and global economies.
“Like most economists, it has been difficult for me to forecast something we have never seen before,” Walden said when asked why he had upped his estimate.
“But as the days have unfolded, things have gotten worse – hence the more dire forecast.”
While the 2008-2009 financial crisis sent the US economy into a tailspin over several months, the coronavirus has proved to be a rapidly growing contagion both in terms of health and economic impact.
Citing economic impact, NC Chamber warns governor against a ‘shelter in place’ order
“The economic damage is occurring rapidly – much more so than in the Great Recession,” Walden said, referring to 2008-2009.
And he pointed out the tech sector will not be immune.
“Even tech companies will feel pain as consumer and business purchases drop,” he warned.
Layoffs spread across NC
Unemployment is already surging in North Carolina with more than 80,000 new unemployment claims filed last week, according to state figures.
Mass layoff notices (called WARN), which are required by federal law of many employers, have not kept pace with the jobless numbers. Most cuts reported have been in hospitality and services.
Layoffs costing hundreds of people their jobs in NC but notices don’t capture true scope of cuts
But on Monday, GE Aviation said it would cut 10 percent of its workers. While not disclosing where the cuts would be made, GE Aviation employs some 400 people in Durham and several hundred more in Asheville. And a small aviation unit at RDU also is shutting down.
Meanwhile, the state’s economy could be slowed further should Gov. Roy Cooper issue a “shelter in place” order which would shut down much business.
‘Save the economy’
Walden said such a declaration would hurt.
“Consideration of sheltering in place is based on medical experts’ assessment of what us needed to quickly contain the virus. Certainly, anything that further restricts personal interactions will move us closer to shutting down the economy,” Walden said.
“It’s a question of whether we accept more pain now to have a quicker resolution to the crisis later.”
Looking ahead to a possible economic rebound, Walden is cautious.
“I am hopeful for a strong rebound, but much of that will depend on the federal aid package to households and businesses now being debated.,” he said.
“We need a large, sustained package to – literally – save the economy!”
