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N.C. unemployment at 5-year high of 6.6%
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Published: August 16, 2008
A souring economy in North Carolina received another piece of bad news yesterday, with the jobless rate hitting a nearly five-year high of 6.6 percent in July, the N.C. Employment Security Commission reported.
The forecast for the rest of the year is even bleaker, with economists predicting that the jobless rate could rise in 2009 to a level not experienced in 25 years.
"The state unemployment rate will go higher, with the seasonally adjusted rate to average 7.1 percent for the remaining five months of the year," said Michael Walden, an economics professor at N.C. State University. "The rate will continue to rise into 2009, peaking near 7.5 percent."
To put that forecast into perspective, the last time that the state's unemployment rate was 7 percent was in January 2002.
The last time that the jobless rate exceeded 7 percent was in the recession of 1983-84. The rate at the peak of that recession was 10.2 percent in February 1983, according to Larry Parker, a spokesman for the commission.
Statistics on state jobless rates by county will be released next week.
In June, the unemployment rate in the Triad was 6.4 percent.
The state's unemployment rate historically has been below the national level, but lately it has been higher for six consecutive months, with the national rate at 5.7 percent in July.
Ironically, even though North Carolina's rate has increased nearly 2 percentage points since 4.7 percent in December, the state's national reputation for having a solid job market continues to attract both individuals and families trying to find work for one or both spouses and, potentially, older teenagers.
"People are responding to the state getting such positive national publicity as a great place to live and work," said Anna White, a regional vice president for Adecco, a staffing company. "We're just not in as good a position to absorb the migration as we have been in recent years."
The state's work force increased by 44,522 during July to 4.6 million.
Nearly 12,900 more North Carolinians were employed in July compared with June, with the leisure and hospitality sector having a net gain of 3,800 jobs, along with 1,900 in educational and health services, and 1,800 in financial activities.
"People believe they can find work in our state, and that is why they are out there looking for jobs," said Harry Payne Jr., the chairman of the commission.
"We continue to see job announcements, such as the one Gov. Mike Easley made Thursday in Guilford County concerning Mack Trucks Inc., where nearly 500 new positions will be created," Payne said.
However, the commission also reported a 31,625 increase in the number of residents considered to be unemployed. The commission reported that there were 2,600 fewer government jobs during July, along with 2,000 fewer in the trade, transportation and utilities sectors, and 1,700 fewer in manufacturing.
Economists and employment officials said that there is no single factor behind the sharp increase in the jobless rate, but one reason is seasonal.
The commission counts college students, high-school students 16 and older, and teachers in the summertime labor force. Those students and teachers have been facing increased competition for summer jobs from adults trying to add to their household incomes.
Economists said that another major factor is the slowdown in the national and local economies, particularly in the housing and financial-services sectors, has been contributing to significant job cuts.
Some economists said that if people who are underemployed for their skill level or who dropped out of the work force were factored into the jobless rate, it could be up to 2.5 percentage points higher.
"You are probably seeing more one-income households sending the other spouse back into the workplace to help deal with higher fuel and food prices," White said.
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
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