NC sees jobless rate climbs again, to 10.4 percent

By EMERY P. DALESIO

RALEIGH, N.C.

North Carolina's unemployment picture grew fuzzier Friday, with the August jobless rate jumping, fewer workers drawing a paycheck, but also more new jobs added than any state but one.

The state unemployment rate jumped to 10.4 percent in August from 10.1 percent in July, the highest level since May 2010, the state Employment Security Commission said. North Carolina's jobless rate is worse than the national average of 9.1 percent.

North Carolina's unemployment rate increase between July and August was one of the sharpest in the country behind only Illinois and Pennsylvania, two other states in which manufacturing has been a big employer. North Carolina has lost 289,300 nonfarm jobs since the recession began in December 2007, with manufacturers shedding nearly one out of five positions or 99,300 jobs in that time.

While the state survey of households showed 14,524 fewer workers were employed in August than the month before and an additional 11,747 were jobless and looking, Wells Fargo Securities economist Michael A. Brown saw hope.

More people are trying to get back into the workforce, starting to search when previously they were sitting on the sidelines, Brown said. The evidence of that was a separate survey of businesses that reported North Carolina companies adding 16,500 jobs, the country's largest month-to-month employment increase after Minnesota, he said.

"Essentially, what that does is expand the pool of those individuals who are unemployed because you have a bigger population looking for work," Brown said. "Folks are starting to see that jobs are becoming available, though it's very, very slow. But it's still enough to get them back into the labor market."

Private sector jobs have increased by 31,600 this year, while government employers have shed 11,000 this year, the state employment agency said.

The vast majority of the jobs added in August -- 13,600 -- were the result of state, local and federal governments hiring. Some of them were teachers and other school workers getting new contracts after a summer in which layoffs loomed as a result of tight state and local budgets.

"What's going on there is that we're starting to see state and local revenues are starting to come back," Brown said. "We're actually exceeding expectations for bringing some of those jobs back. I think that that's a positive sign. The real question that remains is will this trend continue."

North Carolina collected 7.6 percent more in taxes in August than the same month last year, the Office Of State Controller reported Friday. Tax collections have increased each month this year and were up by 10.3 percent in July in a sign that business and personal incomes were improving.

Still, North Carolina had the country's eighth-highest unemployment rate in August, led by Nevada at 13.4 percent, the U.S. Bureau of Labor Statistics reported Friday.

Part of that is because manufacturers and other employers have adopted technologies that require higher technical skills that will take years for thousands of laid-off workers to acquire, Brown said.

"We are looking at years, and not a matter of months, to get back to a pre-recession peak level of employment," Brown said.

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Emery Dalesio can be reached at http://twitter.com/emerydalesio