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Mecklenburg joblessness falls from a year ago

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  • Other area counties

    A look at unemployment rates in surrounding counties, compared with May 2012:

    •  Gaston: 9.6 percent, down from 10.1 percent.

    •  Lincoln: 9.5 percent, down from 9.8 percent.

    •  Catawba: 10.2 percent, down from 10.8 percent.

    •  Iredell: 8.9 percent, down from 9.5 percent.

    •  Rowan: 9.2 percent, down from 9.7 percent.

    •  Cabarrus: 8.4 percent, down from 8.9 percent.

    •  Union: 7.5 percent, down from 8.0 percent.



Mecklenburg County’s unemployment rate fell half a percentage point in May from a year ago, but rose by the same amount compared with April.

Unemployment jumped to 8.9 percent in May from 8.4 percent in April, ending three consecutive months of declining unemployment, according to preliminary figures released Tuesday by the N.C. Department of Commerce. But it fell compared with last May’s 9.4 percent figure.

The May figure, which isn’t seasonally adjusted, drew differing interpretations from experts Tuesday.

“Unemployment has come down a lot from last year,” said John Connaughton, a UNC Charlotte economist. “It’s not as fast as we’d like to see, but we’ve really started to see changes in the economy in the second quarter of 2013.

“We’re seeing consumer confidence going up, housing prices going up – all signs that suggest there is sufficient demand and the economy is picking up speed.”

But despite improvement from last May, the labor market is far from healthy, said John Quinterno, who works at South by North Strategies, a Chapel Hill company that researches economic and social policy.

“Did things improve over the year? Sure,” he said. “But to put it in context, are we at the 5.6 percent rate we saw (in Mecklenburg) in May 2008? No. We are in absolutely terrible shape.”

Mecklenburg’s unemployment rate is the 31st lowest among North Carolina’s 100 counties, trailing far behind Currituck County’s 5.7 percent unemployment rate, but ahead of Scotland County’s 16.2 percent rate, the state’s highest.

But the county’s unemployment matched trends across the state: 87 of the 100 counties in the state saw spikes in May compared to April, while the rates for 71 counties fell between May 2012 and May 2013, according to Quinterno.

Economists on Tuesday weren’t troubled by the April-to-May increases around the state, which are typical. Historically, May is a month when the labor markets are in flux, muddled by the end of the school year and the arrival of thousands of students looking for jobs, said Mark Vitner, a senior economist for Wells Fargo.

The situation in Charlotte

Vitner said recovery is evident in the number of jobs created in May. Charlotte’s metropolitan area had the largest net employment increases in the state, adding 8,400 jobs in May and 20,900 jobs throughout the year.

But Quinterno said that while it is important that jobs are being created, Charlotte residents should pay attention to what kinds of positions are offered.

He said the Charlotte area saw large increases in three sectors over the year: leisure and hospitality; professional and business services; and trade, transportation and utilities.

“Jobs in those sectors aren’t noted for great quality,” he said, adding that they are often defined by low wages, odd hours and temporary work.

To improve the economy, Quinterno said, it’s important for the labor market to improve.

“It’s terrible for the economy as a whole,” he said. “We have human talent, but we’re forcing people to work in positions that don’t make the best use of their skills.”

Quinterno said the creation of low-wage jobs is prevalent across the state, which has a seasonally adjusted employment rate of 8.8 percent – the fifth-highest in the nation. On average, he said, North Carolina creates 5,200 jobs a month.

“That’s not getting us where we need to be,” he said. “We still have not replaced jobs lost during the recession.”

But Connaughton said job growth in North Carolina is on the upswing: In 2012, North Carolina had the second largest job growth year since 1998.

“Despite all of the rhetoric, firms are adding jobs,” Connaughton said.

Effects of jobless benefits cut

Tuesday’s numbers were released in the same week that changes took effect in North Carolina’s unemployment benefit program – cutting maximum unemployment benefits by roughly one-third, and reducing the maximum weeks of benefits. The changes also mean the end of federal extended unemployment benefits for more than 70,000 jobless North Carolinians as the state becomes the first in the nation to opt out of the federal long-term compensation program.

The new unemployment system will drive the unemployment rate down, Vitner said.

“Academic research shows that extended unemployment benefits tend to raise the unemployment rate by three-tenths of a percentage point,” Vitner said. “People will start joining the workforce and take jobs now that they may not have taken previously, so we’ll see job growth pick up.”

But Quinterno said that the cut in unemployment benefits will drive the rate up. Less unemployment compensation means less available spending money, which has the potential to slow economic growth.

“Lower spending means lower sales,” he said. “And employers might have to make (employment) cuts in order to respond to diminished business conditions, which could actually increase the unemployment rate.”

While the repercussions of the new benefits system will not be measured until the late summer, for now, Mecklenburg County’s unemployment rate rests more than a percentage point above the national unemployment rate, which hit 7.6 percent in May.

McCabe: 704-358-5197; Twitter: @mccabe_caitlin
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