N.C. jobless rate decreases for seventh consecutive month
The state’s employment picture took another positive turn during January, with the jobless rate decreasing for the seventh consecutive month, the N.C. Commerce Department reported Monday.
The rate dropped to 6.7 percent from 6.9 percent.
It has fallen by 2.1 percentage points in the past year, and is at its lowest level since 6.6 percent in July 2008 — three months before the full effect of the economic downturn began to be felt in the state and nationally.
“North Carolina’s economy appears to be gaining momentum,” said Mark Vitner, a senior economist with Wells Fargo Securities.
“The drop in the unemployment rate was accompanied by a modest rise in the labor force and much larger gain in employment. We suspect that the strengthening recovery in home building is pulling some workers back into the labor market, leading to an increase in both the labor force and employment.”
However, the reasons for the decline — and the factors behind it — remain unclear, in part because the state’s jobless data went through an annual benchmark recalculation to meet federal guidelines.
One typical result of the annual benchmarking is a reduction in the adjusted monthly jobless rates. For example, the January 2013 jobless rate was revised from 9.5 percent to 8.8 percent. The revised 2013 monthly rates declined by 0.5 percentage points to 0.7 percentage points through October.
That means the year-over-year drop in the jobless rate, while significant, wasn’t as deep as initially thought.
The benchmarking also resulted in a significant decline in the number of North Carolinians considered unemployed, as determined by the Commerce Department’s monthly household survey. That survey found in December that the state’s labor force was down 110,930 compared with December 2012. There was a net gain of 13,414 jobs and 124,344 fewer people considered unemployed.
When people stop looking for work, they are no longer considered unemployed for the purpose of calculating the jobless rate.
The January totals, following the benchmarking, showed the state’s labor force down 60,373 compared with January 2013. There was a net gain of 45,283 jobs and 105,656 fewer people listed as unemployed.
According to the monthly employer survey, there was a net gain of 70,100 private-sector jobs from January 2013 to January 2014. That data does not distinguish how many of those are full time, temporary or part time.
Adding to the job-picture confusion was a loss of 7,200 private-sector jobs from December to January. That includes 5,600 in leisure and hospitality services; 5,300 in the trade, transportation and utilities sector, typically representing the end of seasonal retail jobs; 3,500 in government; and 3,200 in professional and business services.
On the positive side, there was a net gain of 6,400 construction jobs, 1,900 in the “other services” sector and 1,700 in education and health sciences.
“The household survey numbers were good, so the drop in the jobless rate was for good reasons,” said Michael Walden, an economics professor at N.C. State University. “I put more stock in the payroll survey due to its much larger sample, so I don’t view January as stellar for the job situation in North Carolina.”
Gov. Pat McCrory and Republican legislators have touted the decline of the unemployment rate over the past seven months as signs of a “Carolina comeback.”
They claim that a tough-love approach that included reducing weekly jobless benefits in terms of maximum amount and number of weeks have made individuals more willing to take available jobs, including at lower wages and potentially below their skill level, as their benefits run out.
“We are proud to see the results of the fiscally conservative, pro-business policies that the General Assembly enacted over the past three years help North Carolina’s economy gain momentum,” House Speaker Thom Tillis, R-Mecklenburg, and Senate President pro tem Phil Berger, R-Rockingham, said in a joint statement.
Meanwhile, advocates say the rate drop continues to reflect individuals leaving the labor market altogether rather than finding work.
“There’s nothing special about the second half of the year growing faster than the first half” for hiring, said Allen Freyer, an analyst with the left-leaning N.C. Justice Center.
‘The same thing happened in 2012. The only difference was that the state created more jobs from July to December 2012 than it did from July to December 2013. We can’t claim something super special happened in 2013 when it was less special than what happened in 2012.”
Andrew Brod, a senior research fellow for UNC Greensboro’s Center for Business and Economic Research, said about 60 percent of the drop in number of unemployed people was because of people leaving the labor force.
“That’s still not a great number, but it’s less bad than it appeared before the benchmarking.” Brod said.