Business

NC unemployment rate hits 10.4 percent -- highest in 14 months

Posted September 16, 2011 10:33 a.m. EDT
Updated September 16, 2011 6:54 p.m. EDT

Unemployment

— North Carolina’s unemployment rate increased to 10.4 percent in August, the highest rate in more than a year.

The state Employment Service Commission reported Friday that the number of non-farm jobs increased by 16,500, but the ranks of the unemployed grew by 11,747, to 468,140.

The jobless rate is the highest since 10.5 percent in June 2010. The rate in July was 10.1 percent.

Nationally, unemployment stands at 9.1 percent, and the August figures mark the first time North Carolina's jobless rate is more than a percentage point above the nationwide rate.

Political parties were quick to blame each other for the rising unemployment rate.

"North Carolina Democrats, such as Gov. Perdue, have refused to take public stances or action on key issues related to economic expansion in the state," the state Republican Party said in a statement.

"This increase in unemployment is a direct result of the job-killing Republican budget that took effect in June," state Democratic Party Chairman David Parker said in a statement, adding that Republicans promised in June that the job market would improve by September.

Most of the net job increase came in the government sector at 13,600, as many school districts opened for a new academic year.

“We are seeing gains in employment,” ESC spokesman Larry Parker said. “They are not large gains, but we have added more than 31,000 jobs since January.”

The growth in government payrolls came despite state budget cuts that took effect in July.

Parker said the surge in government payrolls was “similar but somewhat smaller” than in the past. Overall, government payrolls are down 15,000 from August of last year.

The size of the state’s labor force also decreased by nearly 2,700, as more people dropped out of the work force and were no longer seeking employment.

Based on a household survey that counts self-employed and other workers, the number of people holding jobs fell to 4.03 million from 4.045 million in July.

The private sector areas hiring the most in North Carolina last month were professional and business services and education and health services.

"Companies are hiring," said Rod Frankel, who owns a staffing company in Raleigh. "It is very difficult to compare the state unemployment numbers with what's going on here (in the Triangle). It's said over and over again that we live in a bubble, that we live in a vacuum, but it's entirely true."

Frankel said companies had been hiring temporary workers, but in the last six months, he's seen the number of direct hires increase.

"I think companies are now willing to spend some of that cash they may have been sitting on," he said.

Chas Scarantino, who co-founded Magnus Health, a software company that offers a web-based program to schools so they can manage students' medical records, said he has hired four employees in the past three weeks, increasing his staff by more than 25 percent.

"It's an exciting time for us," Scarantino said, noting that the company has grown from its first sale in February 2009 to now working with 900 schools.

The non-farm payroll number is based on a separate survey of businesses. That survey showed an increase of just under 3,000 jobs and a jump of 16,500 in the total non-farm workforce, to 3.88 million.