N.C. unemployment surges to 6.6%, highest since 2003

Posted August 15, 2008

— North Carolina’s unemployment rate soared to 6.6 percent in July, the highest level since August of 2003.

In raw numbers, unemployment reached 302,717 people – an all-time high from the previous record of 271,092 in June, according to the North Carolina Employment Security Commission.

Helping drive the rate up was a surge in the state’s workforce as more people were seeking jobs. The number of people working or seeking employment climbed to 4,604,235 in July, topping the previous record of 4,561,644 set in May.

The jobless rate spiked from 5.9 percent in June and at 6.6 percent is nearly a full point higher than the national 5.7 percent rate. The U.S. rate was 5.5 percent in June.

“We were surprised by the jump in the rate,” said ESC spokesperson Larry Parker. “At the same time, there are a lot of different factors at work. We’re encouraged that employment is up for the first time since May. We also saw a sizable increase in the number of job entrants and job force re-entrants.”

N.C. State University economist Dr. Michael Walden also didn’t expect such a sizable jump. He also predicted worse is yet to come.

“I was surprised by the size of the jump, but not surprised by the upward trend in the rate,” he told

Continuing challenges in the economy don’t bode well for employment, Walden said.

“I expect the seasonally adjusted unemployment rate to average 7.1% for the remaining five months of the year, with still higher rates in early 2009, peaking at near 7.5%,” he explained.

Even as the jobless rate increased, the number of people working also climbed, the ESC reported. Some 4,301,518 people were working in July, up 12,897 from June. The record for employment was set in January at 4,325,878.

Walden noted the employment improvement could be short lived.

“Yes, it was encouraging to see the rise in employment, but I don't expect this to carry through the rest of the year,” he said.

Offsetting the increase was the overall growth of the workforce – new residents, first-time job seekers and people wanting to return to work – by 92,358.

The jobless rate increase to 6.6 from 5.9 was the biggest one-month jump since October of 1981 when unemployment soared to 7.1 percent from 5.8 percent in September, Parker noted.

The surge in people out of work or seeking jobs in July followed two consecutive months at 5.9 percent. Unemployment has increased seven consecutive months and is up from 4.9 percent in January.

“North Carolina experienced significant growth in the labor force in July, with the number of individuals looking for work increasing and many of them finding jobs,” said ESC Chairman Harry E. Payne Jr. in a statement. “We also saw a rise in the number of workers either returning to the labor force or entering it for the first time.

“People believe they can find work in our state, and that is why they are out there looking for jobs,” he added. “In addition, we continue to see job announcements, such as the one made by Gov. Mike Easley on Thursday in Guilford County concerning Mack Trucks Inc., where nearly 500 new positions will be created.”

Parker noted that the numbers reflect a mixture of attitudes about the economy.

“We still see job orders being written,” he said, referring to companies seeking workers through the ESC. “Unfortunately, there are more people seeking those jobs. The job market is tight.

“It’s really not one thing you can put your finger on,” he added about the job picture. “People do feel they can get a job or that they need a job due to the economic situation.”

The biggest decrease in jobs came in the government sector, which declined by 2,600. The trade-transportation-utilities sector shed 2,000 jobs, and manufacturers cut 1,700 positions.

Employment growth included 3,800 more jobs in leisure and hospitality and educational and health services at 1,900 jobs. Professional and business services firms upped employment by 1,800.


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  • Sincerity Aug 15, 2008

    "Here's another crazy idea. How about cutting back that nearly 2 1/2 trillion dollars we spend on social programs (nearly 50% in administrative costs)."

    How about getting rid of faith based intiatives? That money is just going into a hole with no oversight and there has been some abuse of the system.

  • BULLDOZER Aug 15, 2008

    I have had to let go a full/part time employee because there is nothing happening right now for him to do. I will however re-hire him or someone else when the housing market in my area starts back up. There are tons of jobs for people to take. I would certainly work at Lowes or Hoke Depot before i sat at home proud to work there. There is way too long of unemployment benefits for my comfort in this country. Sorry folks. Working somewhere is better than working nowhere.

  • Joe Aug 15, 2008

    We're the highest taxed state in the Southeast and in the top 5 in the nation. What businesses in their right minds would want to open in our state, except when Mike Easley and his Democratic buddies give tax incentives which we end up paying for?

  • logitech Aug 15, 2008

    It is so interesting how people bring up the next polition who will fix the problem. Its not the one person its the group that causes or fixes the issues.
    As for the unemlpyment rate increasing, it is going to keep increasing. Heres why, most places that are hiring only want to pay the minium salary. The cost of living keeps increasing, all those loosing there houses because they cant pay for it. This country is slowly becomming the land of the rich and poor.

  • veyor Aug 15, 2008

    Mobile Geek - The private sector IS in a recession. The government will know it next year. Just wait Brother.

  • wildervb Aug 15, 2008

    "Why do you think Obama can do anything? Is he gonna wave a magic wand and poof there will be prosperity? He's not the second coming, even though many think he is."

    Obama and the Democratic Congress just have to re-allocate our resources. Just imagine how much we could have improved our roads, bridges and schools with the trillion or so we threw at Iraq.

    "Historically, tax increases result in LESS REVENUE. The pocket is tight and people spend less, not more. Thus tax increases typically turn into more tax increases to recover revenue losses. And yes, letting taxes cuts expire is a tax increase."

    There is of course a diminishing rate of returns on taxes at higher rates, its not true that all tax increases result in less revenue. Or that all tax decreases result in more revenue. If it were true, we could set the rate to 1% and have all the money we need.

  • Mobile Geek Aug 15, 2008

    "Those of us in the private sector have been shouting from the rooftops about the yes, recession, we are in, but it still comes as a surprise to government."

    Sorry to burst your bubble, but we are not. A recession is 2 quarters of NEGATIVE growth in GDP. Not LOW growth, or ZERO growth, but NEGATIVE growth.

    Fourth quarter of last year was revised to show slightly negative growth (less than 1%) and that was it. First quarter of 2008 showed positive growth, and the second quarter has doubled that.

    This despite all of the mortgage issues and the credit issues. That's a testament to the resilience of our economy.

  • saltnsanddefenderofdamiddleclass Aug 15, 2008

    Mobile Geek, with the politicians we have(either side) I gave up on any meaningful tax reform. I'm now hoping for at least some surgical strikes beginning with AMT. As far as the social programs go I'm not sure how we can even reduce them when a reduction in the rate of growth is called a cut and you get news stories about starving people. The public will have to have an education on baseline budgeting before lowering spending on social programs will ever be feasible.(That and the fact that politicans use social spending to buy votes)

  • Mobile Geek Aug 15, 2008

    "First, stabilize the tax code, leaving it as it is now with the current incentives for purchasing business equipment, and eliminate AMT as it is taxing those it was never intended to tax."

    I'd favor eliminating the tax code completely and go with the Fair Tax concept. Tax consumption and nothing else. Eliminate all specialized taxes. The more people consume, the more they pay. The less they consume the less they pay. And if you hate the rich so much, what better way to get them to pay more than this? Who consumes more resources on an individual basis? The Rich of course. And wow, a consumption tax could actually encourage people to be more conservative and responsible with what and how much they consume, which in turn would lower the demand for natural resources which are in short supply or even scarce.

    Here's another crazy idea. How about cutting back that nearly 2 1/2 trillion dollars we spend on social programs (nearly 50% in administrative costs).

  • appgrad95 Aug 15, 2008

    I don't know about anyone else on here, but my tax rebate check went straight to VISA...and it's not b/c I had bought anything exorbitant with the card in anticipation of getting it either. Day-to-day living...gas for the car, food for the belly. I'm about 2 months away from being credit card debt free and I plan to keep it that way. Also, I'm thankful for the help that tax rebate gave me in getting there sooner. I don't remember getting any "extra" tax refunds under Clinton, do you?