NC jobless rate dips, but employers continue to shed jobs

Data released Friday by the state Department of Commerce show the jobless rate declined to 8.7 percent, down from 8.9 percent in July.

The nationwide unemployment rate is 7.3 percent.

"There's so much behind the numbers that indicate the economy still has a ways to go," said Aaron Chatterji, an economist at Duke University's Fuqua School of Business.

What's behind the North Carolina unemployment rate?

For example, North Carolina employers shed more than 3,500 jobs in August, and the state's labor force shrank by 12,303, to 4,684,577.

"The rate went down simply because we had more people drop out of the labor force," said Mike Walden, an economist at North Carolina State University. "We'd rather see the unemployment rate go down because there are more people working."

More than 409,000 people in the state remain unemployed, down 8,741 from July.

Once people without a job stop looking for a job, the government no longer counts them as unemployed.

"No one has a precise estimate of (how many people have stopped looking for work), but most people agree a significant part of this problem is people who are discouraged," Chatterji said.

For the second consecutive month, government-sector jobs saw a big decline, at more than 6,800. Professional and business services, education, health services, trade, transportation and utilities all saw employment sector gains.

"We're not seeing jobs increase at the same pace," Walden said, "because the nature of work is changing – more machinery, more technology. They're replacing workers."

The silver lining in the numbers, he said, is that the private sector added thousands of jobs in August. Still, both he and Chatterji said they wouldn't be surprised if North Carolina's unemployment rate trends back up in the coming months as more people start looking for work again.

The state jobless rate was 9.5 percent in January but had been slowly declining. A year ago, the statewide unemployment rate was 9.6 percent.