N.C.'s jobless rate hits 6%, highest in 4 years

North Carolina hasn't had a job market this bad in more than four years.

Unemployment rose to 6 percent last month from 5.9 percent in May, according to figures released Friday by the N.C. Employment Security Commission. In South Carolina, the unemployment rate dipped to 6.2 percent in June from 6.5 percent in May.

In North Carolina, it was the sixth consecutive monthly increase and the highest rate since December 2003.

And that's not the sum of it.

The total number of workers employed in North Carolina fell by 23,911 between June 2007 and June 2008, the biggest annual decline in six years.

“It looks like we're probably accelerating our job losses,” said Mike Walden, an N.C. State University economist who tracks the state economy.

North Carolina is suffering from the troubles plaguing the nation overall: a slumping housing market, rising energy costs, worried consumers who have pulled back on spending. On some fronts – namely housing – North Carolina was better positioned than many other states heading into the economic downturn.

But its labor market right now is hurting more. U.S. unemployment was 5.5 percent in June, half a percentage point less than in North Carolina.

Two factors, in general, explain the rise in joblessness: history and people.

Traditionally, North Carolina, because of a large industrial base, does worse than the nation during economic slowdowns. While manufacturing accounts for fewer jobs than it once did, it's still the single largest sector of the economy and represents about a fifth of gross state product.

The manufacturing sector in June shed 3,100 jobs statewide. Only construction fared worse, eliminating 3,900.

Meanwhile, the health care, business and professional services industries added jobs. And that helps explain the other factor contributing to the rise in unemployment: people.

North Carolina is making a transition to an economy based on knowledge.

Leaders have worked to recruit businesses in technology, pharmaceutical and biotechnology industries that require more advanced skills.

The focus has brought more attention to the state and attracted workers from California, Florida, New York and other places in search of new opportunity. In part because of that phenomenon, the labor force grew by more than 34,000 people between June 2007 and June 2008.

A rising labor pool has increased pressure on employers to add jobs.

While those in technology and other industries are still hiring, they're not doing so as quickly as they once were.

Most economists predict that national economic troubles will persist into next year, which doesn't bode well for the labor market.