Business

N.C. unemployment surges to 6.9% – highest since 2002

Posted September 19, 2008 10:19 a.m. EDT
Updated September 19, 2008 11:26 a.m. EDT

— Unemployment in North Carolina jumped to 6.9 percent in August, the highest rate since 2002, the state Employment Security Commission reported Thursday.

A slowing economy led to a drop in employment of more than 45,000 jobs with many students returning to school.

However, the number of people out of work and seeking jobs climbed by 9,999 to a record 314,729.

The troubled financing and banking sectors, which is heavily based in Charlotte as well as across the Triangle, shed 4,400 jobs in August, the ESC said.

The jobless rate, which has increased for eight consecutive months, was 6.6 percent in July. A year ago, the rate stood at 4.7 percent.

The 6.9 percent rate is the highest since January 2002 during the last recession when it hit 7 percent.

“While some of the employment loss can be attributed to students returning to school, we know the decline in the national economy is having an impact on North Carolina’s employment picture,” ESC Chairman Harry Payne said in a statement. “We are experiencing a very tight job market and we have a lot of job seekers. While job orders have varied depending on the location around the state, we are still hearing from employers who need workers.”

The job picture is likely to worsen, according to North Carolina State University economist Michael Walden.

“The unemployment rate will go higher - over 7 percent is now assured - for two reasons,” Walden told WRAL.com. “First, the economy is still not "out of the woods" - so employers will make further cuts in coming months. Second, even when the economy improves, employers are slow to add workers, which also puts upward pressure on unemployment. I now don't see a peak in unemployment until a year from now.”