The state unemployment rate fell for the seventh consecutive month in January and is now at its lowest level in more than five years.
But the labor market continued to give off mixed signals, as the state again shed jobs even as its jobless rate declined.
The rate fell from 6.9 percent in December to 6.7 percent in January, according to data released Monday by the Labor and Economic Analysis Division of the N.C. Department of Commerce. That’s the lowest the rate has been since August 2008, and just slightly below the national rate of 6.6 percent.
But North Carolina lost 7,200 jobs in January, according to a payroll survey of employers, and has added 70,100 jobs over the past year, an annual growth rate of 1.7 percent.
“I think this report is very consistent with all of the reports we’ve seen really for the past four years, which is when our statewide recovery started,” said John Quinterno of South by North Strategies, an economic and social policy consulting firm in Chapel Hill. “Month-to-month we seem to have some positive improvements but the overall rate of job growth is not rapid enough to really change the trajectory we’re on.”
Quinterno noted that North Carolina still has 71,000 net fewer payroll positions than it did in December 2007, even while the state has continued to add residents over the period.
“That is absolutely stunning, and that’s not something we should be happy about,” he said. “It’s not something that’s consistent with a recovery.”
The bright spot continues to be the jobless rate, which has fallen rapidly over the past year – it stood at 8.8 percent in January 2013. N.C. State University economist Michael Walden said the January data shows a state labor market continuing to make modest improvement.
Walden said the January data can be unpredictable, in part because it is a month when many retailers scale back their holiday hiring.
The biggest job declines in January occurred in leisure and hospitality services (5,600), transportation and utilities (5,300), government (3,500) and professional and business services (3,200), according to the payroll survey. The largest job increases were in construction, which added 6,400 during the month.
Walden said the elements are in place for job growth to pick up in 2014, and he estimates that the state will add about 100,000 jobs this year. He points to an improving housing market, stronger household balance sheets and looser lending standards from banks.
One worrying characteristic of the state’s recent economic recovery is that it has coincided with a shrinking of the labor force. That has raised concerns that the rapidly falling jobless rate in part was the result of jobless workers giving up their search for employment.
According to a household survey, which estimates the size of the labor market, the labor force grew by 6,053 in January at the same time that the jobless rate fell – a welcome change from recent months. The labor market has still declined by 60,373, or 1.3 percent, over the past year.
Walden said North Carolina’s economy still faces challenges. The majority of the jobs being created in the state are in metro areas such as the Triangle and Charlotte. And a significant percentage of the jobs being created are in low-paying industries.
“We’ve got the disparity in terms of the labor market as well as the geographic disparity,” he said.