North Carolina’s unemployment rate remained unchanged in June at 6.4 percent as the state experienced a large drop in government employment that economists attributed to the end of the school year.
North Carolina lost 5,800 jobs in June, largely because of a decline of 13,300 government jobs. The state added 7,500 private sector jobs.
The state typically sees a drop in government employment around this time of year, said Mark Vitner, an economist with Wells Fargo in Charlotte. He said with so many snow days extending the length of the school year, the bulk of the losses may have been pushed into June instead of spread out over several months.
Vitner said the state’s private sector job growth remains on pace for an annual rate of about 2.5 percent.
“Seventy-five hundred jobs is roughly on pace with where we’ve been over the last year,” he said. “Hiring has picked up in most industries.”
The biggest gains in June were 3,700 jobs in professional and business services, which includes the technology sector, and financial services, which added 3,400.
Leisure and hospitality services, which had been driving much of the state’s job growth over the past several years, declined by 200 jobs in June. Vitner noted that it’s probably a good sign that the sector is no longer such an engine of growth, given that the positions typically pay lower wages and offer fewer hours.
After a surge of nearly 19,000 job seekers entered the labor market in May – causing the jobless rate to rise by two-tenths of a percentage point – the labor force contracted by 10,719 in June.
Teachers going on vacation for the summer may also have contributed to the contraction in the labor force, said N.C. State University economist Michael Walden.
“I view this as a continuation of the trend we’ve been on,” he said of the June data, which was released Friday by the Labor and Economic Analysis Division of the N.C. Department of Commerce.
Walden expects job growth to pick up slightly in the second half of the year, with the state creating about 85,000 jobs in 2014. Over the past 12 months, North Carolina has added 74,800.
“We’re getting the quantity back, and now we’ve got to get the quality and the rate of pay,” Walden said.
He noted that average wages have dropped about 5 percent in recent years after adjusting for inflation.
“People have seen their standard of living impacted by that,” Walden said. “If we start to get that turned upward, as well as the number of jobs, that will put us in a much better place.”
North Carolina’s jobless rate remains slightly above the national rate, which was 6.1 percent in June.