N.C. unemployment dips slightly, initial jobless claims jump

Posted July 17, 2009 10:27 a.m. EDT
Updated July 17, 2009 1:34 p.m. EDT

— North Carolina’s unemployment rate dipped slightly in June to 11 percent from a record 11.1 percent in May, the N.C. Employment Security Commission reported Friday.

Even though the number of people working dropped by 5,626, the ranks of those unemployed fell by 4,721, the ESC said.

In a worrisome sign, initial claims for unemployment jumped to 105,907, an increase of 9,229 from May. The number of initial claims in May had dropped 4,644 from April.

Another is employment in the leisure and hospitality sector, which shed 2,100 jobs at a time when North Carolina restaurants, resorts and hotels are typically hiring people for the vacation season. ESC figures show that leisure and hospitality jobs dropped to 390,100 last month. That was 7,700 fewer than a year ago.

Has North Carolina’s economy reached bottom? North Carolina State University economist Michael Walden, who predicted in a recent economic analysis that unemployment would hit 13 percent, isn’t convinced.

“North Carolina's unemployment rate dipped slightly in June, yet the number of jobs also declined by over 5,600,” Walden told “The reason the rate declined while jobs fell is, again, the issue of discouraged workers – workers without a job but who are not actively looking for work and therefore aren't officially counted as unemployed.

“So the drop in the unemployment rate is, unfortunately, misleading in this case because it does not signal that jobs are more widely available.”

Larry Parker, a spokesperson for the ESC, pointed out that the jobs pictured has stabilized over the past six months. After big jumps in November, December, January and February to 10.7 percent from 7 percent, the jobless rate has increased only 0.3 of a percentage point.

“We’re still at a very high unemployment rate,” he said. “One tenth of a percentage point is not a sizable change.”

Parker also agreed that the drop in people receiving unemployment benefits was attributable to some degree to discouraged workers, those whose benefits have expired and even “frustrated people who have given up looking for a job here and moved to another state.” Just how many fall into those categories is not known, Parker added. “There’s no way we can track that.”

The job picture for workers in non-farm industries the employment picture did improve a bit with 4,700 jobs being added. Governments added 13,900 positions, but those were offset in large part by a decline of 5,500 manufacturing jobs.

The government category includes state, local and federal positions and counts temporary summer jobs as well as changes in teacher jobs, Parker added.

North Carolina has been especially hard hit by the economic recession in the manufacturing sector. Some 74,000 jobs have been cut over the past year.

“There were some positives in the report,” Walden said. “Job losses appear to be slowing. Professional and business services jobs registered a modest increase, as did hours worked in manufacturing.

“But workers, especially those workers who are unemployed, still face a very challenging job market, and these challenges will likely persist for the remainder of the year.”

Seasonally adjusted, total non-farm industry employment, as gathered through the monthly establishment survey, increased by 4,700 jobs over the past month

The state’s jobless rate remains one of the worst in the nation. In June, U.S. unemployment increased to 9.5 percent from 9.4 percent a month earlier.

Dating back to June of 2008, North Carolina’s jobless rate has nearly doubled from 6.1 percent.