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Statewide jobless rate hits 7 percent

Statewide unemployment hit 7 percent in September, the highest since January 2002, as the fallout from the national economic downturn deepens.

September was the ninth consecutive month in which the state's jobless rate has risen, increasing from 6.9 percent in August. Statewide unemployment remains higher than the national average, which stood at 6.1 percent last month.

The September data was released Friday by the N.C. Employment Security Commission. County-by-county data will be released next week.

In all, 318,309 people were unemployed in the state last month, up from 213,973 a year before.

N.C. State University economist Mike Walden predicts the jobless rate will rise to about 8 percent before things improve.

When the housing bubble burst, economists had been bullish on the state's economy because N.C. real estate values were not overheated and the damage appeared contained. But as the extent of the mortgage crisis became clear – freezing world credit markets, bringing down financial giants on Wall Street and requiring a federal bailout – forecasts for the region became less optimistic. Economists now predict the regional slump will last at least through next year.

“We don't expect a quick turnaround from this thing,” said Mike Helmar, director of industry services at Moody's Economy.com, an economic forecasting service.

The mortgage crisis has dramatically penetrated into the heart of the state. Wachovia, the banking giant based in Charlotte, is being acquired by rival Wells Fargo, a move that will likely result in job losses in Charlotte.

But state statistics also show that even as joblessness increased, the number of people employed also rose. Last month, 4.26 million people in the state had jobs, which is 6,668 more than in August.

“We're still attracting workers, though at a modest pace,” Walden said.

Among the job losses, manufacturing has taken the biggest hit, falling nearly 22 percent in one year. Since the 2001 recession, North Carolina has lost 214,000 manufacturing jobs, according to state figures.

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