Jobs are being created in South Carolina at a record pace, just not fast enough to keep up with the influx of people into the labor pool at more than three times the national rate.
But that could change in the last six months of the year, an official with the Federal Reserve Bank said Wednesday.
“It is hard to believe the state will keep up the pace of that inflow in the second half of the year,” said Rick Kaglic, senior regional economist at the Charlotte branch of the Federal Reserve Bank of Richmond.
He believes the state will see “strong gains in payroll employment” from July through December, helping to lower the state’s jobless rate.
For the past several months, South Carolina’s unemployment rate barely budged. In April, it stood at 6.7 percent, unchanged from March.
The reason: more people looking for jobs.
The number of people working and looking for work in April grew by nearly 9,900 to nearly 2.26 million, a new labor force record in the Palmetto State, according to the state Department of Employment and Workforce.
The national labor force growth rate is 1.1 percent. In South Carolina, it’s 3.7 percent.
“It’s more than three times the national rate in South Carolina,” Kaglic said. “That means firms looking to expand have a full labor pool available for them.”
He offered no immediate explanation for the surge of people looking for work in South Carolina since migration data won’t be available for another year, but he said jobs are being created across the state.
In the Lowcountry, Boeing’s growing and both Daimler and Volvo each recently announced plans to build $500 million car-making plants near Charleston.
The Charleston Metro Chamber of Commerce estimates an average of 43 new residents a day move to the region.
The actual number of people holding a job in South Carolina set a record in April, passing 2.1 million, an increase of just over 8,100 from March.
The state employment agency said people entered the labor force at historic levels during the first four months of the year “as the state’s economy continued expanding at a robust pace.”
Because so many people are entering the labor force looking for work, they are exceeding the number of jobs being created.
The ranks of those reporting an inability to find work in April swelled by nearly 1,800 to close to 152,000 in South Carolina, the state employment agency reported.
“It’s a good sign that people are encouraged and coming back looking for work,” said local economist Stephen Slifer with NumberNomics. “A better sign is the bulk of them are finding jobs.”
He said some of the people looking for work don’t have the qualifications, but some of those finding jobs now have employable credentials.
“At some point the increase in the labor force will slow down,” Slifer said. “As you run out of bodies that have skills employers need, it implies higher wages and it will lead to higher inflation down the road.”
Sectors showing strong gains in employment in the state last month include professional and business services; trade, transportation and utilities; educational and health services; construction; leisure and hospitality; government; and other services.
“Construction is starting to see a nice recovery in housing activity,” Kaglic of the Fed said. He also lauded growth in professional and business services as a sign of an expanding work base and said improving consumer confidence bodes well for the leisure and hospitality sector as Americans spend more disposable income.
“The one soft spot is manufacturing,” Kaglic said.
In South Carolina, manufacturing and information reported modest job losses in April.
Based on regional surveys conducted by the Federal Reserve, Kaglic said, the weakness in manufacturing is because some industries built up inventories during foul winter weather when transportation was hampered and aren’t producing as much materials until the stocks are depleted.
But, he added, “Firms remain very optimistic on hiring over the coming six months.”
In the Charleston-North Charleston Metro area, unemployment was 5.2 percent, the lowest in the state. Nearly 3,000 nonfarm jobs were created in the region last month.
For the nation, the jobless rate declined slightly to 5.4 percent in April from 5.5 percent in March.
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.