On the surface, North Carolina benefited from another slight improvement in its job market in October.
The unemployment rate dipped to 9.6 percent from a revised 9.7 percent in September, the N.C. Employment Security Commission reported yesterday. The rate has improved from at least a 34-year peak of
11.2 percent in February.
But dig deeper into the numbers, and it’s hard to find any salve for a still wounded economy.
Once again, the primary reason for the decline was state residents dropping out of the job market. The commission reported that the state’s work force fell by 12,152 in October — 5,270 fewer workers being employed and 6,882 fewer considered to be unemployed.
“Some 102,000 North Carolinians have left the labor force since May,” said John Quinterno, a principal with South by North Strategies Ltd., a research company in Chapel Hill that specializes in economic and social policy.
“That contraction is responsible for much of the recent decline in the unemployment rate and is a sign of an extremely unhealthy labor market. By the same point in time after the 1990-91 and 2001 recessions, the labor force was growing again.”
The relevance of the unemployment rate has been questioned during this recession because when calculating it, the commission does not include several categories of people:
• Those who have stopped looking for work.
• Those who are underemployed for their skills.
• Those who are able to work full time but can only land part-time work.
• Those who are receiving severance packages after the elimination of their job.
Also included in the rate are those who have exhausted their state and federal unemployment benefits.
A rate compiled quarterly by the U.S. Bureau
of Labor Statistics — the U6 index — includes those people. The latest update found that 17.6 percent
of adults in North Carolina were without jobs on Sept. 30, compared with 17 percent nationally in October.
There was no net gain of jobs during October, with a loss of 2,100 government jobs offsetting the addition of 2,100 private-sector jobs.
“We are starting to see the economic environment bounce back in the Triad and other parts of the state,” said Lauren Coker, a regional manager for Robert Half International in North Carolina.
“However, hiring managers are still being cautious — they don't want to add a full-time job they aren't sure they can keep. This recession was deeper than most, and it may take somewhat longer for job growth.”
Economists and employment officials said they believe that Congress eventually will vote to provide at least one more extension of federal unemployment benefits.
An extension of unemployment benefits enacted this summer will expire Dec. 1, and a bill to extend them for three months failed to pass in the U.S. House on Thursday. Republicans opposed the bill because they were denied a chance to attach spending cuts.
It's estimated that without the extension, 13,757 North Carolinians will exhaust their benefits by Jan. 18, including 2,787 in the Triad and Northwest North Carolina, according to the commission.
“I have not seen the same level of frustration/angst we saw earlier this year when the extensions were set to expire,” Archie Hicks, the manager of the commission’s office in Winston-Salem, said.
“It could be that people are feeling better about the economy and their prospects, or it could be that they simply have not seen sufficient coverage of the expiration of the extensions to become alarmed.”
rcraver@wsjournal.com
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