The state's unemployment rate jumped to 11.1 percent in May -- an increase of almost half a percent over April's figures -- and analysts predict an even bleaker picture in the coming months.
The jump comes after three months in which the rate had stayed between 10.7 percent and 10.8 percent, according to figures from the N.C. Employment Security Commission released yesterday.
"I think this tells us that some of the optimism registered last month was perhaps premature," said Michael Walden, an economics professor at N.C. State University. "The labor market is weak."
The commission said that the state's work force declined by 28,855 workers from April to May. More than500,000 North Carolinians were looking for work last month, the commission said.
"I think we'll go over 12 percent, unfortunately," Walden said. "We probably won't see consistent gains in the job market until next year." He said that consolidation in the automobile marketplace and losses of government jobs as officials trim state and local budgets will likely produce more losses.
Also, there likely won't be a quick turnaround in employment when the economy rebounds, Walden said. Employers are likely to lag at least three months behind the start of a recovery as they wait to make sure that their gains are going to last.
The nationwide rate for May was 9.4 percent.
North Carolina was one of eight states to register record highs for the number of unemployed, along with California, Nevada, Oregon, Rhode Island, South Carolina, Florida and Georgia. In all, 48 states and the District of Columbia recorded declines in employment.
Unemployment rates for the Triad will be released in about two weeks.
Mark Vitner, a senior economist for Wachovia Securities, said that the state hasn't seen employment figures this bleak since the early 1970s.
"We're still losing jobs hand over fist," Vitner said. "The unemployment rate shows no sign of topping out yet."
Vitner predicted that the state's unemployment rate is at least a year away from peaking, as some of its bedrock job sectors -- such as manufacturing and construction -- continue to shed jobs. Since the start of the recession in December 2007, North Carolina has lost about 83,000 manufacturing jobs.
Like Walden, Vitner also predicts that peak unemployment in the state will be about 12 percent.
"The big increase in the unemployment rate occurred last fall in the financial markets free-fall," he said. "We're now seeing more of a slow grind."
Statewide unemployment has increased 5.2 percent since May 2008.
"While we continue to have job announcements in areas across North Carolina, we are still experiencing some job losses in many job sectors," said Moses Carey Jr., the chairman of the Employment Security Commission.
To determine the unemployment rate, the commission primarily counts people who are without a job and actively looking for work. People who stop looking are removed from the unemployment data.
Others not counted include stay-at-home spouses, retirees, full-time students, people attached to their former jobs through severance packages, and people without jobs who have moved into the state.
■ Paul Garber can be reached at 727-7327 or at pgarber@wsjournal.com.
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