NC Economist Warns of Job Market Headwinds Despite Steady Employment Numbers
State economist warns job seekers face limited opportunities despite steady unemployment numbers, with hiring concentrated in just a few sectors.
RALEIGH, NORTH CAROLINA — North Carolina’s job market remains stable but shows concerning signs for job seekers as hiring becomes increasingly concentrated in select sectors, according to a leading state economist analyzing the latest federal employment data.
Sarah Dickerson, Research Economist at the Kenan Institute of Private Enterprise, characterized Friday’s national jobs report as “solid and steady” but warned that the employment landscape offers limited opportunities for those seeking work this summer. The Bureau of Labor Statistics reported 172,000 jobs added to the U.S. economy in May.
“Hiring is essentially going to be concentrated in a few sectors — healthcare, leisure and hospitality. Government jobs that were added were predominantly local government jobs,” Dickerson said in a briefing with reporters.
Healthcare Drives Job Growth
Healthcare continues to lead employment gains, driven by multiple factors including demographic shifts and lingering effects from the pandemic era. “In terms of healthcare, one reason why we’ve continued to see jobs concentrated in this sector has to do with our population aging, but also some of that burnout that has held over from the pandemic,” Dickerson explained.
While the national unemployment rate remained steady at 4.3% for the second consecutive month, North Carolina’s unemployment rate stands at 3.7%. However, Dickerson noted the apparent stability masks underlying challenges in the job market.
Limited Hiring Activity Across Sectors
“We’re continuing to see more of this low-hire, low-fire environment,” Dickerson said, describing a market where employers are neither aggressively hiring nor laying off workers in significant numbers.
The cautious approach to hiring particularly affects recent college graduates, who face unemployment rates higher than the general working population aged 16 to 65. According to Dickerson, this gap between new graduates and all workers continues to widen.
Remote Work Challenges for New Graduates
Technology and workplace changes contribute to the difficulties facing recent graduates entering the job market. Artificial intelligence and automation play a role, but remote work arrangements present additional obstacles for new workers seeking employment.
“Remote employers may not be as eager to hire, train and mentor recent college graduates, knowing that they’re going to have to go through that entire process remotely,” Dickerson explained.
A new study by the Federal Reserve Bank of New York supports these observations, finding that unemployment among young people increased by almost one full percentage point between 2017-19 and 2022-24.
The data suggests that while North Carolina maintains a relatively low unemployment rate compared to national figures, the broader employment picture reveals challenges for job seekers, particularly those entering the workforce for the first time or seeking to change careers outside the dominant hiring sectors.
