N.C. unemployment rate rises to 9.7 percent

Economist predicts only a slight improvement in employment during year

Posted: Friday, Sep. 21, 2012

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SC jobless rate stays at 9.6 percent
S,C, jobless rate stays at 9.6 percent

South Carolina’s unemployment rate remained at 9.6 percent in August as the state’s labor force participation rate dipped to 58.4 percent, the lowest since at least 1976, the S.C. Department of Employment and Workforce said Friday.

That means fewer people have jobs or are actively looking for work. The national unemployment rate dropped to 8.1 percent in August from 8.3 percent as folks dropped out of the job hunt.

In South Carolina, employment in professional and business services declined by 2,000 jobs in August from July, and the leisure and hospitality industry shed 1,600 jobs as the traditional summer tourism season wrapped up.

But government jobs grew by 2,200, and education and health services saw a 1,400-worker increase as schools started again after the summer break.

The number of unemployed people in South Carolina dropped by more than 2,000 to nearly 205,000. Employment dropped for the fifth straight month by more than 10,000 to 1.9 million.

“While I recognize there is more work to be done, today’s unemployment rate announcement shows me that South Carolina is on the road to economic recovery. We saw healthy gains in the private sector as the education and health services, financial activities, construction and Information sectors all registered increases,” said Abraham Turner, executive director of the S.C. Department of Employment and Workforce.

The state’s unemployment rate rose for the second consecutive month as the economy continues to suffer from anemic growth.

North Carolina’s seasonally adjusted unemployment rate rose one-tenth of a percentage point to 9.7 percent in August, which follows on the heels of a two-tenths of a percentage point increase in July, the state Division of Employment Security reported Friday.

“I see this as a step back for the job market in North Carolina,” said N.C. State University economist Michael Walden.

July was the first month in 2012 that the unemployment rate rose. Previously, it either fell or was unchanged.

Just four states have higher unemployment rates than North Carolina: Nevada, which leads the nation with 12.1 percent unemployment, followed by Rhode Island, California and New Jersey.

The state’s unemployment rate is still down from a year ago, when it stood at 10.7 percent.

“This is just another report that is consistent with the pattern of the past two-and-a-half years,” said John Quinterno of South by North Strategies, a Chapel Hill firm. “It’s a pattern of minimal job growth coupled with fairly high levels of joblessness.”

The state’s unemployment rate remains well above the national rate of 8.1 percent.

The unemployment rate rose even though the state added 1,100 jobs after seasonal adjustments, according to a survey of employers included in the state data. That increase was led by an increase of 8,400 government jobs. The construction sector lost 3,400 jobs during the month.

Quinterno said he takes the growth in government jobs with a grain of salt. Although seasonal adjustments theoretically compensate for back-to-school employment, the economy has been struggling so long that some long-term patterns have been disrupted – making it difficult to get an accurate picture.

Indeed, the report issued by the state includes this caveat: “While seasonal adjustment factors are applied to the data, these factors may not be fully capturing the seasonal trend. Therefore ... it is advisable to focus on over-the-year changes” rather than month-to-month fluctuations.

Over the past year, the number of government jobs in North Carolina has fallen by 3,800 to 693,400. Overall, 451,806 workers were unemployed in the state in August.

Walden is projecting a marginal improvement in the state’s unemployment rate the rest of the year, a decline of a few tenths of a percentage point that would keep it above 9 percent.

“No one is happy with that,” he said. “It’s indicative of what a tough, tough economic recovery this has been.”

The Triangle’s unemployment rate for August will be released Sept. 28.

In July, the unemployment rate for the area was 7.9 percent, according to state data seasonally adjusted by Wells Fargo in Charlotte.