For a state still caught in the grasp of recession, positive news -- however incremental -- is welcome.
However, even though North Carolina's jobless rate reached a 12-month low of 10.8 percent last month, economists and employment officials cautioned yesterday against getting overly optimistic.
The state rate was down from 11.1 percent in March and a record high of 11.2 percent in February, according to the N.C. Employment Security Commission.
The state gained jobs for the second consecutive month in April. There was a net gain of 7,500 jobs, led by 6,300 in the professional and business services sectors, along with 6,000 in government.
However, there also was a loss of 3,100 jobs in the trade, transportation and utilities sector, and in leisure and hospitality service sector, along with 1,800 in construction.
"We have seen some variation in the sectors experiencing the growth," said Lynn Holmes, the chairwoman of the commission. "While overall job growth is up, and the unemployment rate is slightly lower, we still face challenges in this tough economy."
Mark Vitner, a senior economist at Wells Fargo Securities LLC, said he is gaining confidence that "we are seeing some genuine improvement across the state."
Still, Vitner pointed out that much of the new government hiring likely came from temporary jobs connected with the U.S. Census Bureau.
Economists favoring the "less bad is good" theory pointed to the number of North Carolinians considered as unemployed dropping by 16,516 during April to 491,467, seasonally adjusted. It is the first time in three months that the unemployed ranks dropped below 500,000. It was considered as a negative economic milestone when the 500,000 mark was surpassed in January.
The commission also listed 22,736 more residents as employed during April, at 4.08 million.
"These are good numbers," said Michael Walden, an economics professor at N.C. State University. "The job market is improving. The question now is how fast."
Even though the jobless rate has dropped for two consecutive months, some economists say that the job market remains in fragile condition. Since December 2007, North Carolina has lost about 270,000 job positions.
"Few positive changes have occurred within North Carolina's labor market so far in 2010," said John Quinterno, a principal at South by North Strategies Ltd., a Chapel Hill research company focused on economic and social policy.
"Perhaps the best that can be said is that conditions have held steady," Quinterno said.
"However, job growth remains insufficient to absorb new workers, let alone those displaced earlier in the recession," he said.
Vitner said that it is possible that the jobless rate could rise this summer as more job-hunters re-enter the work force after completing retraining programs or college.
People ages 16 and older who aren't actively pursuing work are not considered as unemployed. If those people, and workers who are underemployed, are factored into the jobless rate, it could be as much as 2.5 percentage points higher, economists say.
Quinterno said that the summer and early fall months could remain challenging for job-hunters.
"Much of the recent growth has resulted from such government actions as temporary census hiring, housing tax credits, emergency unemployment-insurance payments, and recovery-act funding," Quinterno said.
"Many of these supports are phasing out, and it is unclear if enough private-sector demand exists to take their place."
rcraver@wsjournal.com | 727-7376
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