The North Carolina job market ended 2009 the way it began -- with a sharp monthly increase in the unemployment rate.
After dipping slightly over the past six months, the state unemployment rate rose 0.4 percentage points during December to reach at least a 34-year high of 11.2 percent, the N.C. Employment Security Commission reported yesterday.
The commission said that unemployment rates before 1976 were not seasonally adjusted, so it is not comparable to data published since then.
The jobless rate rose a stunning 1.6 percentage points to 9.7 percent in January 2009 and has been above 10 percent the past 11 months.
Most economists projected an increase in the rate. They expected that more people would re-enter the job market to find seasonal work; those who were unsuccessful were again counted as unemployed.
The ESC reported that 19,022 more North Carolinians were considered as unemployed during December, raising the total to 505,939. The labor force dropped by 12,316.
Mark Vitner, a senior economist with Wells Fargo Securities LLC, said at the recent local economic forecast that the state unemployment rate would peak by midsummer at around 11.5 percent.
"It would begin to decline on a consistent basis around the middle of 2010 and move back below 10 percent around the middle of 2011," Vitner said.
Since the recession began in December 2007, North Carolina has shed more than 254,000 jobs, including 191,258 from December 2008 to December 2009. Those numbers are seasonally adjusted by the ESC.
Some economists have said that if the underemployed -- those working in jobs below their skill level for the sake of earning a paycheck, the stay-at-home parent, the retiree and the discouraged -- are factored into the jobless rate, it could be as much as 2.5 percentage points higher.
The employment sector taking the biggest hit in job cuts during December was the leisure and hospitality industry at 2,600, followed by 1,200 in construction and 900 in manufacturing.
However, there were some promising gains, led by 1,900 in professional and business services.
Robert Whaples, an economics professor at Wake Forest University, said that the increase in the jobless rate will be limited as the national economy sputters forward.
"At the national level, most of our leading economic indicators are rising, which usually, but not always, means sustained growth ahead," Whaples said. "We'll need to have sustained growth of about 3 percent or higher for the unemployment rate to begin a noticeable decline."
The ESC reported that as of Wednesday, it had borrowed $1.7 billion to meet its obligations for paying initial unemployment benefits -- the sixth-most among the 27 states participating in the program.
"The past two years have been atrocious ones for working North Carolinians," said John Quinterno, a principal at South by North Strategies Ltd., a research company that focuses on economic and social policy. "North Carolina's labor market is stuck in recessionary doldrums.
"A sizable share of the working-age population is jobless, yet little demand for labor appears to exist, especially in the private sector," Quinterno said. "Until those change, conditions are unlikely to improve."
rcraver@wsjournal.com | 727-7376
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