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Number not what is seems; small rise in N.C.'s jobless rate comes with a caveat, experts say
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Published: April 18, 2009
The slight increase in the North Carolina's unemployment rate to 10.8 percent in March may appear a welcome breather given that the rate has doubled in the past year.
However, economists cautioned yesterday that the state . likely hasn't seen a peak in its unemployment rate, and that the 0.1 percentage-point increase was likely caused by nearly 31,000 people no longer being considered as unemployed.
The increase -- reported yesterday by the N.C. Employment Security Commission -- continued the streak of setting a new monthly high for the unemployment rate. The commission said that unemployment rates before 1976 were not seasonally adjusted, so it is not comparable to data published in the past 33 years.
When it comes to determining the rate, the commission primarily counts people who are without a job and actively looking for work. For example, the state has had a near doubling of people considered as unemployed in the past year to 492,512 -- just a 2,417 increase in March.
Eventually, people who stop looking -- whether out of frustration or by choice -- are removed from the unemployment data.
They aren't the only ones unaccounted for in the data. Others include stay-at-home spouses, retirees, full-time students, people attached to their former employer through severance packages, and people without jobs who have moved into the state.
The unemployment rate also doesn't account for people who are underemployed -- those who are working in full- or part-time jobs below their skill levels.
Economists say that if all those people are factored into the jobless rate, it could be as much as three percentage points higher.
That's why Michael Walden, an economics professor at N.C. State University in Raleigh, said that the slight increase in the jobless rate was not good news.
"The lesson is keep your eye on the number employed, not the unemployment rate," Walden said.
It was the first time since October that the increase in the state's unemployment rate was lower than that of the national rate, which jumped to 8.5 percent from 8.1 percent in February.
North Carolina has the fifth highest unemployment rate in the country, trailing Michigan (12.6 percent), Oregon (12.1 percent), South Carolina (11.4 percent) and California (11.2 percent). It also had the fourth highest total of job cuts in the nation at 41,300.
Every job sector outside of government posted job losses during March, including 10,100 in professional and business services, 9,200 in manufacturing, 8,500 in construction, and 5,800 in leisure and hospitality services.
Anna White, a regional vice president for Adecco Group North America, an employment-services company, said she expects unemployment numbers to "creep up" in coming months rather than in sharp upticks.
White said she is encouraged by an increase in temporary job placements in financial services, particularly companies trying to meet demand for refinancing mortgages, and manufacturing.
"Employers remain very cautious about full-time hiring and are weighing the cost of expanding," she said.
Larry Parker, a spokesman for the commission, said that 62 percent of the initial unemployment claims in March were for people still attached to their employer.
"A lot of these are from the manufacturing sector," he said.
"I think when we start seeing the claims drop -- and those that are attached get called back to work -- we'll see things go in the other direction."
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
Checking out help
On Monday, the Forsyth County Public Library will begin a series of weekly "Survive and Thrive" seminars aimed at helping local job-hunters. They will take place from noon to 1:30 p.m. at the Central Library. For more information, call 703-2908.
• Monday: Opening seminar. Antonio Stevenson of Griffith Academy will be the speaker.
• April 27: "Reinventing Yourself for Today's Job Market," with Jesse Joyner of Forsyth County Human Resources.
• May 4: "Ways to Save," with Deborah Womack of the N.C. Cooperative Extension Service.
• May 11: "Networking Your Way to the Job." Bob Cain will be the speaker.
• May 18: "Understanding Unemployment Benefits and Support Services."
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