Business

N.C. unemployment drops to 10 percent in June

Posted July 16, 2010 10:31 a.m. EDT
Updated July 16, 2010 5:59 p.m. EDT

— North Carolina’s unemployment rate declined to 10 percent in June.

That’s the fourth consecutive month the jobs picture has improved, the state Employment Security Commission reported Friday.

At 10 percent, the jobless rate is the lowest since January 2009, when it was 9.7 percent. A year ago, the jobless rate was 11 percent.

The national unemployment rate is 9.5 percent.

According to the ESC, non-farm jobs grew by 5,100 last month.

Michael Walden, an economist at North Carolina State University, said he liked much of what he found in the data.

“I found the June employment report for North Carolina encouraging,” Walden told WRAL.com “The non-farm employment count, which is a broader survey and usually the one economists focus on, showed a total gain of 5,100 jobs, even after accounting for the 6,500 government jobs (mainly Census workers) that were lost.”

The rate has fallen from a peak of 11.2 percent in February to 11.1 percent in March, 10.8 percent in April and 10.4 percent in May.

“There was positive news in the June data in that the state experienced a small gain in jobs,” ESC Chairwoman Lynn Holmes said in a statement. “Since February, North Carolina has added over 45,000 jobs, but we still have a long way to go.”

Most jobs were added in the leisure and hospitality sector, which saw 7,900 new jobs last month.

“Construction still lost jobs, indicating that sector is still not in recovery mode,” Walden said.

Gov. Beverly Perdue said she was encouraged by the job growth.

"While the pain isn’t over yet, this month’s employment figures make me optimistic that North Carolina is on a path to recovery, led by our private sector industries and small businesses,” Perdue said in a statement.

Walden said he believes further improvement is ahead for the state, but he also cautioned that the recovery from the recession will continue to be slow and painful.

“The state's (seasonally adjusted) unemployment rate fell to 10 percent, which puts it on track for my forecast of an end-of-the-year state unemployment rate of 9.5 percent,” he said. “One major negative in the report was that 26,000 individuals dropped out of the labor force.”

When people stop looking for work, they are no longer counted as unemployed.

“While the report is generally upbeat, we should recognize that the recovery from the recession will be agonizingly slow,” Walden said. “It could easily take three to four years to see the unemployment rate return to pre-recessionary levels.

“The main reason is the consumer," he said. "Consumers entered this recession with record high debt loads. The recession, mainly through it effects on reducing consumer wealth, has forced consumers to pay down on debt and save more."