Business

NC jobless rate stuck at 9.7 percent

Posted June 17, 2011 10:26 a.m. EDT
Updated June 17, 2011 12:32 p.m. EDT

Unemployment

— North Carolina’s unemployment rate remained stuck at 9.7 percent in May as the state lost 7,400 non-farm jobs.

The jobless rate has been the same for three consecutive months after a four-month streak at 9.8 percent.

Based on seasonally adjusted numbers, North Carolina lost 7,400 non-farm jobs in May, with the professional and business services sector shedding 4,000 workers, the state Employment Security Commission reported Friday.

The decline to 3.88 million left North Carolina with 1,000 fewer non-farm jobs than a year ago. However, a drop in the size of the state’s labor force by 45,000 kept the jobless rate from being worse than 9.7 percent.

The workforce does not include people who have run out of unemployment benefits and are no longer seeking work.

“The labor report for May for North Carolina was mixed,” North Carolina State University economist Michael Walden said after looking over the numbers.

“The broader household survey showed a gain in jobs, yet the more closely watched payroll survey showed a drop in employment,” he added.

The seasonally adjusted number for non-farm jobs is based on a survey of employers and is considered by economists to be a more accurate barometer of the job market.

“Since the bottom of the job market in February 2010, the state has added only 34,300 net non-farm jobs, less than a 1 percent gain,” Walden said. “Yet, the broadest measure of economic production (gross domestic product) shows North Carolina has re-gained the total production it lost during the recession. So, the issue is a relatively jobless’ economic recovery.”

For 2011, non-farm jobs are down by 1,000 due in large part to cutting of 32,500 government jobs, the ESC said.

A year ago, the jobless rate was 10.8 percent.

Nationally, unemployment in May was 9.1 percent, up slightly from April.

Including farm industry workers, North Carolina’s employment ranks climbed by 12,040, to 4.066 million.

Walden said he does not believe the unemployment situation will be much better over the rest of the year.

“Looking ahead, economists do think several temporary factors put a drag on the economy in the spring,” he said, citing the weather and an earthquake and tsunami in Japan. “So, I would expect better job growth for North Carolina in the months ahead.

“However, the growth will not be stellar. Due to budget constraints, both state and local governments are likely to continue to pare their labor force," he said. "So, any job growth will have to come from the private sector, and the private sector is still cautious. Plus, there is continued weakness in the housing market and the ‘deleveraging’ (debt reduction) that households are continuing, both of which are contributing to slow economic growth.

“For the rest of the year, average monthly non-farm job growth of 4,000 in the state will be average. The year-end unemployment rate in the state will still be above 9 percent. I'll give a point forecast of 9.3 percent.”