SC unemployment rate plummeted in August. What that means
In August, South Carolina dropped to its lowest unemployment rate since the COVID-19 pandemic began, S.C. Department of Employment and Workforce director Dan Ellzey said in a statement Friday morning.
The seasonally adjusted rate was 6.3% last month, 2.4 percentage points lower than July’s rate of 8.7%. And it slashed April’s rate of 12.8% by about half.
July saw nearly 213,000 people across the state unemployed. In August, that number dropped to nearly 153,000. More than 2.26 million people around the state were estimated to be working last month, compared with just under 2.25 million in July.
Gov. Henry McMaster celebrated the announcement, saying, “Today’s news shows that South Carolina’s economic recovery is well underway. We still have a lot of work to do to get our people back to work and get our economy back to full strength, but this is clear evidence that we’re on the right track and that should be encouraging news for every South Carolinian.”
Unemployment rates in South Carolina, as across the country, have yet to return to pre-pandemic numbers. In August, 8.4% of people nationally were unemployed, down from 10.2% in July. In South Carolina, unemployment rates are still nearly double what they were immediately before the pandemic began — March’s unemployment rate in the state was 3.2%.
In his statement, Ellzey compared the accomplishment to the Great Recession of 2008, noting that it took the unemployment rate much longer to recover from the Great Recession than it has taken to recover from the pandemic.
“Unlike the Great Recession which was a slower economic decline and an excruciatingly slow economic rebound, the COVID-19 pandemic wreaked havoc quickly on our workforce and economy, but was equally met with an encouraging swift recovery,” he said.
University of South Carolina research economist Joseph Von Nessen said that while the numbers show the economy is continuing to recover, the unemployment rate decrease does not tell the whole story.
“About two-thirds of that drop was not the result of more people becoming employed, but because of a large decrease in the size of the labor force itself,” he said. “And the reason for that is because school started.”
Von Nessen explained that as students went back to school, mostly virtually, many parents chose to stay home and no longer be a part of the labor force — defined as people either employed or unemployed but looking for work. Researchers determine these trends, he said, based on the responses to household surveys sent out each month.
For the first time since April, the civilian labor force shrank in August, dropping by more than 41,000 from the previous month.
Looking ahead to the final months of 2020, Von Nessen said, several factors could have a large influence on economic recovery.
“One of those is getting to a new normal or getting to some sense of equilibrium surrounding school scheduling,” he said. “When do we establish stability with what school scheduling looks like? There’s still some back and forth at the local levels at what that’s going to look like long term. We also have yet to see whether or not there will be a spike in cases due to students going back.”
Another is whether Congress passes another COVID-19 stimulus bill.
“There’s virtually unanimous agreement that the U.S. economy needs additional stimulus in order to help it recover. That’s not controversial,” he said. “What is more controversial is what should be part of any stimulus package, and how big that stimulus package should be.”
The employment rate announcement comes as many South Carolinians still await federal unemployment relief promised them by the state. More than two weeks ago, South Carolina received approval from the Federal Emergency Management Agency to be part of its Lost Wages Assistance program, which offers those eligible to receive at least $100 in weekly state or federal unemployment benefits and another $300 per week in retroactive benefits, for three weeks initially. The funding has yet to come through.
This story was originally published September 18, 2020 at 11:14 AM with the headline "SC unemployment rate plummeted in August. What that means."
