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N.C. jobless rate 11.1%
It is highest since 1976; January is first time 500,000 unemployed
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Published: March 11, 2010
North Carolina received another stinging one-two punch to its economy during January.
The jobless rate climbed to 11.1 percent -- the highest monthly rate in at least 34 years -- the N.C. Employment Security Commission reported yesterday.
The rate was 10.9 percent in December, a number revised by the commission. It has been above 10 percent for 11 consecutive months.
January also marked the first time that more than 500,000 residents -- 502,533 to be exact -- were listed as unemployed.
Given that people who stop searching for work are not counted in the jobless rate, economists say that the total number of North Carolinians without work could be another 50,000 to 100,000 higher.
"A half million unemployed in the state of North Carolina is sobering, particularly when you realize that these are people we are talking about, and not just a number," said Mark Vitner, a senior economist with Wells Fargo Securities LLC.
"The hardship that many people are enduring today is something I thought our generation would never see. Thousands more workers are working part time or working two or more low-paying jobs to get by. Thousands more have given up looking for work."
Since the recession began in December 2007, North Carolina has shed more than 254,000 jobs, including about 124,000 from January 2009 to January 2010. Those numbers are seasonally adjusted by the commission.
With the average time spent on unemployment being 29 weeks in 2009, Vitner said, it was likely that more than 800,000 North Carolinians went without work at some point last year.
One piece of good news among the bleak reports is that the commission said it would begin paying Tier IV unemployment benefits this coming Wednesday to eligible recipients. The benefits became available as part of the extension of emergency unemployment compensation that Congress passed this week.
Larry Parker, a spokesman for the commission, said that the benefits would last six weeks.
"There is not blanket eligibility for Tier IV," Parker said. "If a claimant runs out of that and they no longer have benefits eligible to them in the extended-benefits program, they will be totally exhausted."
As of March 8, the state had borrowed $1.98 billion from the U.S. Labor Department to meet its obligations for paying initial unemployment benefits -- the sixth-most among the 32 states participating in the program.
Each year, the commission recalculates how it measures employment data, which can lead to an upward or downward revision of the monthly jobless rates for the previous year. The benchmarking is required to meet federal guidelines.
With the revision, the 11.1 percent rate in January becomes the peak of unemployment since at least 1976. The commission said that unemployment rates before 1976 were not seasonally adjusted, so it is not comparable to data published since then.
North Carolina is one of five states to record its highest monthly jobless rate since 1976 during January, the others being California, Florida, Georgia and South Carolina.
The increase in the state rate also widened the gap with the U.S. unemployment rate, which dropped 0.3 percentage points in January to 9.7 percent. Historically, the North Carolina rate has been below the U.S. rate. But the state rate has remained higher for most of the past two years.
Michael Walden, an economics professor at N.C. State University, said that surpassing the 500,000 mark for unemployed North Carolinians is mostly symbolic, reflecting primarily the population growth over the past 11 years.
Walden said that the state will continue to go through a period of growth in jobs and its unemployment rate for several months. The commission reported that the state gained 6,943 jobs during January, but those listed as unemployed also rose by 8,325.
"The increase was a result of unemployed individuals who have stopped looking for work beginning to again look for work as job conditions improve," Walden said. He projects a jobless rate peak between 11.5 percent and 11.7 percent.
Vitner said there is reason for a little optimism because "more firms are hiring today and fewer firms are laying workers off."
Still, he said he will stick with his prediction of the state jobless rate topping out at 12 percent this fall. "That may prove too pessimistic but I am reluctant to change it until we see a few months of better news," Vitner said.
rcraver@wsjournal.com | 727-7376
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