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N.C. unemployment nearly triples in April to 12.2%; economists say worse to come in May

North Carolina’s unemployment rate nearly tripled from 4.3% in March to 12.2% in April, a stark reflection of the COVID-19 pandemic’s impact on the state’s economy.

By comparison, the state unemployment rate reached a 33-year peak of 10.9% in 2010 as the state and national economies began their slow recoveries from the Great Recession. The Triad peak was 11.5% in February 2009.

Economists project the May jobless rate will be significantly higher since the U.S. Labor Department collects employment data during the week that contains the 12th of the month. The April report covers the churn from March 14 to April 12.

The regional and county jobless reports will be released June 3.

The data only reflects 16 days of Gov. Roy Cooper’s executive order implementing stay-at-home restrictions that began March 27.

“The major reason why North Carolina had a lower overall unemployment rate rise was that it invoked a stay-at-home order a little bit later than other states did,” said Zagros Madjd-Sajdadi, an economics professor at Winston-Salem State University.

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“The order had a direct and immediate effect on unemployment rates, but it is unlikely that lifting the order will cause an equally dramatic reversal in the unemployment rate because many job losses were permanent.”

Economists forecast that as many as 2.5 million North Carolinians may be at high- or moderate-risk for a layoff or reductions in wages, tips and work hours, or for furloughs.

“I am calling this downturn a ‘mandated recession,’ to distinguish it from previous recessions,” said Michael Walden, an economics professor at N.C. State University.

“The recession is the medicine we have to endure in order to contain deaths and prevent the health care system from being overwhelmed.”

The employer survey found a 12.5% decline in the state’s non-farm workforce from 4.57 million to just under 4 million.

The private sector experienced a 14.3% decline from March to April, representing a loss of 545,700 jobs, while the government sector had a 3.5% decline representing 26,000 jobs.

As expected, the state’s leisure and hospitality sector took the brunt of the job losses and furloughs with a 48.8% decline in its workforce, down 249,800 to 262,300.

The other services category had the second most impact by percentage at 20.6%, or down 33,200 to 128,000.

Also experiencing double-digit declines were: manufacturing at 10.8%, or down 51,200 to 421,500; information technology at 10.2%, or down 8,000 to 70,000; and education and health services at 10.2%, or down 63,200 to 556,900.

All 10 employment sector declined by at least 3.4%.

“The scope of the job losses is simply staggering,” said Patrick McHugh, senior economic analyst with left-leaning N.C. Budget & Tax Center. “Job losses are concentrated in industries and occupations that typically pay the worst wages so a lot of the people who lost jobs in April had little or no financial cushion to fall back on.”

Walden said the sector job losses are “likely worse for May.”

“I wouldn’t make too much about lower rate than for the nation. The information technology sector was largely not impacted until May.”

In the household survey, the state’s labor force shrank by 5.7%, down 285,739 to 4.68 million.

The number of North Carolinians considered as employed dropped by 13.5%, down 643,157 to 4.11 million.

Those listed as unemployed rose by 105.7%, or up 357,418 to 573.118.

That surge in the unemployed ranks played a significant role in the state’s jobless rate not reaching the 14.7% national rate for April.

Individuals without jobs who are not looking for work are not considered unemployed.

Through March, the state jobless rate had remained below the 5% threshold since January 2017. That’s the level most economists consider as representing full employment — the economic point at which everyone who wants a job has one, employers have the skilled workers they need, and there is limited inflationary pressure on wages.

The labor force data does not distinguish how many workers are full time, temporary or part time, or how many jobs people are working.

The federal labor-statistics bureau’s U6 index includes those categories. The national U6 rate is reported monthly, while states are reported quarterly.

The U6 index rate for North Carolina was 7% on March 31, compared with 22.9% nationally on April 30.

“Many of the jobs that have disappeared likely won’t be coming back anytime soon, which means state and federal leaders have to figure out a way to support people through an economic crisis unlike anything in living memory,” McHugh said.

As of Friday morning, the N.C. Division of Employment Security listed 930,032 individuals as having filed a combined 1.27 million state and federal claims. DES said 573,736 claimants have received state and/or federal benefits, or 61.7% of all applicants.

Some individuals have been required to file a second claim — after being determined to be ineligible for initial state benefits — in order to qualify for federal benefits that often include extended state benefits.

With the drop in the labor force over the month, currently 23.3% of the 3.99 million North Carolinians considered in the state’s workforce as of mid-April have filed a state or federal unemployment claim.

There were 14,061 new claimants Thursday. The daily filing peak was 34,706 on March 30.

Overall unemployment-insurance benefits payments were at $2.37 billion as of Friday morning.

The breakdown is: $1.29 billion from the federal pandemic unemployment-compensation package; $666.7 million in state benefits, and $411.7 million in the federal pandemic unemployment assistance package.

With the state’s Unemployment Insurance Trust Fund at close to $3.85 billion before the brunt of the COVID-19 pandemic began to be felt, 17.3% of that money had been used as of Friday morning.

Restaurants welcome their first dine-in customers since March

Many Winston-Salem restaurants welcomed customers back into their dining rooms for the first time in two months Friday night, as employees and diners breathed a cautious sigh of relief that it is safe to eat out again.

Gov. Roy Cooper announced Wednesday that restaurant dining rooms in North Carolina could reopen as early as 5 p.m. Friday in Phase 2 of the easing of the state restrictions put in place to slow the spread of COVID-19, the disease caused by the novel coronavirus.

Restaurants, though, will be adjusting to a new kind of normal.

Cooper’s announcement came with a five-page list of requirements and recommendations from the N.C. Department of Health and Human Services that affects how restaurants do business during the coronavirus pandemic, and to an extent limits how much business they can do.

Requirements include operating at a maximum of 50% capacity, seating customers 6 feet apart if they are not sharing a table, and conducting daily screenings of employees for virus symptoms. A much longer list of recommendations includes masks for employees, disposable menus and physical barriers at cash registers.

Many restaurants eagerly took up the challenge to rearrange dining rooms, train staff and attend to dozens of small details to make their dining rooms safe and comfortable.

Some of the dozens of restaurants that reopened Friday included Little Richard’s Barbecue, King’s Crab Shack and Oyster Bar, XCaret Mexican Grill, Los Toritos Mexican Cuisine, Cagney’s Kitchen, Rooster’s Wood-Fired Kitchen, Foothills Brewpub and Ryan’s Restaurant.

Though Cooper’s Wednesday announcement had some restaurants scrambling to ramp up operations in a hurry, many had been anticipating the reopening.

“We’ve been preparing for this,” said Nick Allen, the general manager of Rooster’s on Knollwood Street. “We started restocking food a week ago. We started bringing back employees three weeks ago.”

Many restaurants, like Rooster’s, already had been doing takeout, but with limited menus and skeletal crews.

Ryan’s, on Coliseum Drive, had been doing limited takeout and selling some groceries.

“We did takeout on Fridays and Saturdays, but that wasn’t enough to keep the boat floating,” owner Dennis Carter said. “We’ve been waiting for this magic moment, when we could get the entire crew back to work.”

Carter said that Ryan’s new capacity will be down to 100 from 200, and that he reset the parameters for the OpenTable app so customers could reserve only every other table and could place fewer reservations overall.

At Rooster’s, Allen has pit signs on every other table to keep them empty and has added tables — placed well part — on the patio. Rooster’s also has several hand-sanitizing stations, a separate entrance and exit, social-distancing markers and more.

“We have disposable menus, and we’ve taken salt and pepper shakers off the table. We also aren’t using water pitchers. When someone wants a refill of water, we’ll bring them a fresh glass,” Allen said.

At Los Toritos, on Jonestown Road, owner Gustavo Mar said he rented a storage unit so he could remove half of his tables.

“I’ve also been taping off the bar area,” Mar said. “And my staff will be wearing masks at all times.”

He also has removed communal items, such as sugar caddies, from tables, and will serve water from individual, fresh glasses, not pitchers.

Mar said he and his staff took the online course at CountonMeNC.org, which offers COVID-19 help for customers and businesses through a joint effort by the N.C. DHHS, the N.C. Restaurant and Lodging Association and others.

Allen said he and the rest of Rooster’s staff took advantage of a similar free COVID-19 safety course offered through ServSafe, a recognized food-safety training program for restaurant workers.

Mar said that in addition to sanitizing throughout every shift, he has hired a company to come in and do a thorough disinfecting once a week.

Though many restaurants have made a lot of changes in a short period of time because they want to get both employees and customers back in the restaurant, others are moving more slowly — either because they need time to make changes, restock and train staff, or they are concerned about offering customers a safe environment.

Restaurants that expect to open their dining rooms in the next week or two include 1703 Restaurant, Meridian, Fratellis Italian Steakhouse and Three Bulls American Steakhouse in Clemmons.

Mozelle’s Fresh Southern Bistro opened its patio for people who wanted to sit and eat their takeout. It expects to offer table service beginning June 1 — but only for outdoor diners. Its indoor dining room will remain closed.

Similarly, the Porch will keep its dining room closed but serve drinks on the patio — and allow customers to eat their takeout there.

Full Moon Oyster Bar in Clemmons remains entirely closed. Finnigan’s Wake downtown plans to reopen June 2 — but just for just takeout — and then to only gradually work its way toward reopening its dining room.

“We have been evaluating the phases of reopening and believe that a slow, controlled opening is safest,” Finnigan’s said on its Facebook page.

Others that plan to stick to takeout for the immediate future include Tre Nonne, Real Q, Sweet Potatoes, Grecian Corner and B.L.L. Rotisserrie Factory.

“I have such a small dining room and some of my staff are 60 years old. It’s just too hard to make my staff and my customers comfortable,” said Simone Vicidomini, the owner of B.L.L., which is in the same 380 Knollwood complex as Rooster’s. “I don’t have a separate entrance and exit. There’s no place for people to wait for tables,” he said. “I want to get things back to normal. But I want to wait two or three weeks to see how things are going.”

Some customers, though, were appreciative of those dining rooms that were open.

“This is our 10th anniversary,” said Jenny Hicks, who came to Ryan’s from Thomasville with her husband, Daniel, to celebrate.

“It just happened to work out perfectly,” Daniel Hicks said.

A few tables away, Charlie and Amy Terenzi of Greensboro were celebrating their 29th anniversary — two months late.

“We came all the way from Greensboro for this,” Charlie Terenzi said. “Our two favorite places are this and Cowboy (Brazilian Steakhouse) — and we’re waiting for that to open.”

Also among the first returning customers to Ryan’s were Jeff Bacon, the executive director of Providence Kitchen, a program of the Second Harvest Food Bank, and his wife and son.

“It feels great,” Bacon said.

“And,” his wife, Andrea Robinson, said, “we made sure we chose a local restaurant to show our support.”

Over at Little Richard’s Barbecue on Stratford Road, retirees John Roberts and Wendy Holder had parked themselves in an isolated corner of the outdoor patio.

“It feels wonderful to get out, but we’re being careful because we’re in that (high-risk) age group,” said Roberts, 68. But they said they felt comfortable with their masks and social distancing. “I think everyone is doing their best to make people feel safe,” he said.

Inside at Little Richard’s, Tony Gagliardi, a retired restaurant inspector with the Forsyth County Health Department, was enjoying dinner with his wife, Julia.

“This is way overdue,” he said. He said he was pleased with all the measures restaurants are taking to reduce the risks of spreading the coronavirus. “Seeing what’s going on here makes me feel safe,” he said.

Carter, 68, said that words can’t express how he feels to have customers back in the dining room. “I just can’t tell you,” he said, smiling. “I’ve been doing this for 52 years and the last two months have been the most stressful two months.”

Allen at Rooster’s said a restaurant needs the energy of a bustling dining room to thrive.

“I’m a little nervous about a lot of people showing up and how I’m going to control the crowd, but we need customers,” he said. “Ambience is so important. And that energy from customers — that’s what makes the restaurant.”

Judge stops Boone from limiting visitor access to businesses

A judge has temporarily stopped the town of Boone from forcing visitors to wait 14 days before entering most businesses and other places that are open to the public.

Superior Court Judge R. Gregory Horne issued a temporary restraining order Friday evening that forbids the town from enforcing a declaration it passed on Thursday that imposed the waiting period.

Under the town’s emergency declaration passed on Thursday by Boone Town Council, people who came into Boone after having spent the night anywhere outside Watauga County had to wait 14 days before they could enter most buildings that are open to the public.

The declaration stated that by staying in Watauga County continuously for 14 days, visitors could then enter establishments serving the public in Boone.

The town imposed the new rule after the lifting of a similar waiting period that had been in place throughout Watauga County until repealed by the Watauga County Board of Commissioners on May 19.

Hotel owners took the town to court on Friday to stop enforcement of the new order, and Judge Horne agreed with their argument that they would suffer “immediate harm” to their businesses if they had to abide by the new restrictions.

Horne said the hotels would suffer harm to their reputations by being unable to honor reservations previously made by guests.

Attorney Nathan Miller, representing the hotel operators, said the business owners still recognize that they have to take the COVID-19 threat seriously, and that they are more than willing to operate at 50% capacity and maintain social distancing and other requirements.

“All they want to do is conduct their businesses in this new age of social distancing,” Miller said. “The population is suffering with a lack of jobs and bills to pay. People want to visit our community and spend their money in our community. We can make a balance in social distancing.”

The town had issued the new restrictions as an update to its response to the coronavirus pandemic.

Suing the town were Ann-Marie Yates (a travel agent), Mountain Resort Management LLC (operator of Holiday Inn Express of Boone), Hospitality Group of Hickory Inc. (operator of the Fairfield Hotel) and Smokey Mountain Hospitality LLC (operator of Comfort Inn and Suites).

Judge Horne said he did not consider whether the suing hotel operators might win their case in issuing the temporary restraining order, but that he would do so on June 1 when he holds a hearing on a related preliminary injunction the hotel operators are seeking.

The town’s 14-day waiting period, now on hold because of the judge’s order, has exceptions for people who are coming to Boone for medical treatment or who have been tested and found free from COVID-19. The waiting period would apply to both residents and non-residents if they have spent the night elsewhere, but would carve out an exception for commuters who regularly work in Watauga County.

In addition to businesses, the 14-day rule would apply to town offices, non-profit offices and other places, but would not affect the public’s ability to enter county and state offices.

Although officials at the state level on down to counties have talked of reopening the economy, the Boone declaration passed on Thursday maintains that there are still too many unknowns about the spread of the coronavirus.

The resolution passed by the town says testing is inadequate and that “the manner and rate of spread of the coronavirus remains significantly uncertain.” The town is also citing a continued increase in cases, particularly in the nearby counties of Wilkes and Burke.

Because Boone is visited by so many people from places with higher rates of COVID-19, the town resolution states, the measures including the 14-day rule are needed to protect public health.

But on Friday, the Boone Area Chamber of Commerce said that the town’s rules “go too far.”

“At a time when businesses across our country, region and state are seeing restrictions removed, this action will maintain a heavy burden of business loss on a community that’s already been deeply impacted by the economic ramifications of the COVID-19 pandemic,” the chamber said in a statement issued Friday.

State GOP leaders push governor for Phase 2 to last days, not five weeks

State Republican legislators are ramping up their encouragement that businesses apply the squeaky wheel approach in their bid to reopen to customers.

Meanwhile, the Cooper administration reached an agreement with the N.C. Craft Brewers Guild to reopen the state’s breweries, taprooms, brewpubs, wineries and distilleries Friday.

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The key element in the amended order is that these establishments produce “alcoholic beverages for commercial sale off-premises and is, therefore, permitted by the ABC Commission” under the General Statutes.

For example, facilities with commercial permits to manufacture can serve, which allows Foothills Brewing to be open at both sites.

“We’d like to thank Gov. Cooper and his staff for working to provide the needed clarification to allow our industry to reopen in a safe manner,” the guild said in a statement.

“As breweries are already experts in sanitation and food safety standards, we will set the example for how to conduct operations that keep our customers and our employees safe.”

Republican legislators’ advocacy has intensified since Cooper, a Democrat, chose Wednesday to keep closed during Phase 2 several businesses that had been projected to reopen Friday under similar 50% capacity restrictions to restaurants and personal-care businesses.

Those include bars, night clubs, public playgrounds, gyms and fitness centers, movie theaters, bowling alleys, bingo parlors and museums. Phase 2 is scheduled to last until June 26.

One example is Sen. Jim Perry, R-Lenoir, passing along on his Senate Twitter account a Survey Monkey link asking small businesses if they want to participate in potential legal action against the Cooper administration.

Perry released a statement Friday saying “the public has received confusing, conflicting information about everything from graduation ceremonies to brewery operations. Businesses that operate largely the same way are treated differently with no apparent rational basis.”

Meanwhile, some of those still-closed business groups have noted the success of a federal lawsuit against Cooper filed by religious groups wanting more than 10 individuals allowed in an indoor gathering as well as the threat of a lawsuit involving personal-care businesses prior to the Phase 2 decision.

House speaker Tim Moore, R-Cleveland, tweeted Friday that “far too many North Carolina businesses were unexpectedly left behind in Phase 2.”

“When livelihoods are at stake, certainty is paramount and five weeks is forever. I urge the governor to amend (executive order) 141 to help desperate families expecting to reopen today.”

‘More modest step’

Cooper said Phase 2 represents “a more modest step forward than originally envisioned.”

Cooper said those businesses remain closed because “the potential spread of COVID-19 can be significant there.”

“It would be irresponsible to remove restrictions all at once,” Cooper said. “Clearly, that’s a situation that could result in a massive spike in COVID-19.”

Dr. Mandy Cohen, the state’s health secretary, has said that fitness centers and gyms carry higher risk for spread of the virus in part because individuals working out are breathing harder and respiratory droplets can be discharged at greater distances.

“We’ve got to make sure that people have confidence to go out into the economy, and we’re acting to give them that confidence,” Cooper said.

“We’re using the data to make decisions about when it’s safe to do more easing of the restrictions ... and not emotions, not politics, but science and data.”

June 26

That Phase 2 is schedule to last until June 26 has drawn the ire of several GOP Council of State members.

Those members sent Cooper a letter May 12 asking why he has not sought their recommendations and approval of his stay-at-home executive orders, and the subsequent ones enacting phases 1 and 2.

State Treasurer Dale Folwell, who is recovering from a severe case of the virus, said that “when you tell businesses a month ago to spend thousands of dollars in anticipation of something, the governor needs to stand behind it.

“I appreciate more than most the focus on the sick, but we can’t punish the healthy. Flattening the curve applies to commerce also.”

During the meeting, Folwell told Cooper: “I’m asking you, but I’m actually begging you to do that,” allowing the businesses still closed in Phase 2 to open sooner.

“Five weeks is a long time, and I know many, many businesses that are closed now will not be there in five weeks when we reopen,” Agriculture Commissioner Steve Troxler said, according to The News & Observer of Raleigh.

“If we can make decisions earlier than five weeks, then I would certainly encourage that.”

Looking ahead

Cohen said Friday the state continues to experience an overall leveling off of cases and hospitalizations over the past 14 days even as increased testing is finding new cases.

Personal care business employees are required to wear a facial mask and customers would be “strongly encouraged” to do the same.

Cooper said for weeks he believed a statewide approach to Phase 2 was appropriate.

Moore said “all businesses rely on certainty from state government to plan for challenges ahead in any economic circumstance.”

“It is essential that moving forward our economic response to this pandemic be based in transparent data that considers stark contrasts in urban and rural regions of our state.”

Mitch Kokai, senior policy analyst with Libertarian think tank John Locke Foundation, said Cooper’s Phase 2 decision making “appears to be guided more by increasingly vocal public criticism and resistance to his orders.”

“His latest decision is likely to generate complaints from businesses and organizations originally included in Phase 2 plans, but left out of the latest reopening list. Some of these affected business owners might go to court.

“All will be left wondering why the governor does not trust them to take proper precautions to protect their customers and members.”