The state’s unemployment rate inched up in January as North Carolina’s labor force grew at a much faster rate than it created jobs.
North Carolina’s seasonally adjusted unemployment rate rose one-tenth of a percentage point to 9.5 percent, the state Division of Employment Security reported Monday. The rate is now just one-tenth of a percentage point below where it stood 12 months ago.
It remains well above the national rate of 7.7 percent. North Carolina’s labor force grew by 0.2 percent in January while the number of people employed grew by just 0.1 percent, according to a survey of households. The growth in the state’s labor force reflects the fact that North Carolina continues to add new residents despite having one of the highest unemployment rates in the country, said Mark Vitner, a Wells Fargo economist in Charlotte.
“We continue to import job seekers from other parts of the country, which makes it even tougher for us to lower the unemployment rate,” he said.
Vitner said the state’s job growth numbers were solid last month. North Carolina added 15,100 jobs in January after seasonal adjustments, according to a payroll survey of employers included in the state data, and has now added 85,700 over the past year.
One possible concern, Vitner said, is that almost half the job growth in January and nearly a third of the new jobs over the past year were in leisure and hospitality services. He said the worry is that those numbers reflect people working multiple part-time jobs as employers attempt to keep costs low by not taking on new full-time employees.
The numbers could also reflect more job seekers settling for part-time work outside their traditional fields as their unemployment benefits expire.
“That’s been a lingering concern all throughout this recovery, just how strong is the job growth that’s being reported,” Vitner said.
Still, the job gains reported last month did show signs of a broader-based recovery.
In addition to leisure and hospitality, which added 6,500 jobs, the other sectors that recorded large gains were manufacturing (5,400), trade, transportation and utilities (4,000) and construction (1,600). Professional and business services lost 2,600 jobs and education and health services lost 2,300.
“I viewed this as a very positive report,” said Michael Walden, an economist with N.C. State University. “I think it’s indicative of the economy in our state accelerating.” Walden said that North Carolina’s job growth numbers compare very favorably to the nation’s over the past three years. He said from February 2010, when the state and national job markets bottomed out, through January, North Carolina’s total number of payroll jobs grew by 5. 4 percent – above the 4.2 percent increase recorded nationwide over that same period.
Vitner said he expects the state’s unemployment rate to decline by three- or four-tenths of a percentage point this year.
“Most of that improvement will be in Raleigh and Charlotte, where economic activity has truly ramped up,” he said.
While Greensboro, Winston-Salem, Asheville and Wilmington have also seen increased activity, Vitner said the state’s two largest metro areas are outpacing much of the country.
“Raleigh and Charlotte are two of the fastest-growing job markets in the country right now,” he said. “… That’s one of the reasons we’re pulling in all these job seekers from other parts of the country.”
The Triangle’s unemployment rate was 7.7 percent in December. The January rate will be released Friday.
Published: March 18, 2013
By David Bracken