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22 <br /> The headline North Carolina unemployment rate has already fallen to low point almost <br /> equal to the low point in the previous economic expansion of 2001-2007 (Figure 10). However, <br /> this low point is still higher than the low points in the headline unemployment rate in earlier <br /> economic expansions. Yet the significant upgrading of labor force requirements during the last <br /> twenty years and the increased automation of many job tasks means the lowest unemployment <br /> rate associated with a growth cycle will likely be higher than during expansions of the 20th <br /> century. The forecasts by the Federal Reserve suggest a 0.2 percentage point drop in 2017 and a <br /> 0.1 percentage point reduction in 2018 in the national annual average headline unemployment <br /> rate, while the Congressional Budget Office predicts a 0.4 percentage point reduction in 2017 <br /> and a 0.1 percentage point drop in 2018. Taking an average of these two forecasts and applying <br /> them to North Carolina gives a 0.3 percentage point reduction in 2017 and a 0.1 percentage <br /> point fall in 2018 in the headline annual average unemployment rate for the state. Payroll <br /> jobs will increase by 75,000 in 2017 and by 70,000 in 2016. <br /> Economic conditions will continue to vary for the state's regions, meaning differing <br /> regional forecasts for 2017 and 2018. Figure 11 shows the difference between the May 2017 <br /> headline unemployment rate in the state's major metropolitan regions and the lowest May <br /> unemployment rate of the previous growth cycle in the region.11 The same month (May)is used <br /> for the comparisons because the jobless rate data are not seasonally-adjusted at sub-state levels. <br /> A positive number in Figure 11 means the regional jobless rate has not reached the low point of <br /> the previous growth cycle, whereas a negative number in Figure 11 indicates the current regional <br /> jobless rate has fallen below the low point of the previous growth cycle. <br /> Based on this analysis, Rocky Mount, Goldsboro, and Jacksonville have the biggest drops <br /> in their unemployment rates of at least 0.5 percentage points in order to reach the lows of the <br /> previous cycle. A second set of regions -including Fayetteville, Wilmington, New Bern, <br /> Raleigh, Durham, Asheville, Greensboro, and Greenville—have current jobless rates very close <br /> to their lows in the previous cycle. A third group of four metros —Winston-Salem, Burlington, <br /> Charlotte, and Hickory— currently have unemployment rates well below their lows in the <br /> previous economic growth cycle. <br /> There are several implications of these results. First, over half(eight of fifteen) of the <br /> state's regions appear to be close to their low unemployment rate for this cycle. <br /> Second, three other regions —all in the east—need 0.5 to 1 percentage point drops in their <br /> jobless rate before reaching their previous cycle low. These three regions have all been <br /> challenged by recent economic forces. However, as growth continues over the next two years, <br /> tight labor markets in other regions should motivate greater business expansion in areas that have <br /> lagged in the economic recovery. <br /> Third, there are four regions —interestingly all in the western part of the state—that <br /> already have unemployment rates below their previous lowest levels during the last growth <br /> cycle. But there are some caveats —both positive and negative. Charlotte's lowest jobless rate <br /> during the previous growth cycle may have been"artificially high" due to the slow recovery in <br /> the region's significant financial services sector. This sector suffered major downsizing during <br /> 11 In most cases this was May,2007. In one case the date was May 2006,and in two cases the date was May 2008. <br /> 11 <br />