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State officials report jobless rate drop

North Carolina's unemployment rate fell in August, a positive sign for the local economy, even as some officials downplayed the drop's significance as an indicator of economic recovery.

In a report released last week by the Employment Security Commission of North Carolina, the seasonally-adjusted unemployment rate in the Triangle was 5.2 percent, down from 5.4 percent in July. The statewide rate also decreased, to 6.3 percent from July's 6.8 percent, "a pretty big drop," said Michele Walker, an ESC spokesperson.

Although some officials said the local economy is headed toward recovery, they did not want to place too much emphasis on monthly data as an indicator.

"I don't feel that knowing the specific unemployment figure... tells me a whole lot," said Lewis Cheek, a Durham City Council member and mayor pro tempore.

One of the City Council's top projects has been to attract clients to long-stalled downtown development projects such as the former American Tobacco warehouse.

"We want businesses to look at Durham and regard it as an attractive area to be, and that way... we can affect the availability of jobs for our citizens," he said.

Carey Greene, research director for the Greater Durham Chamber of Commerce, said that in spite of the past year's slump, more people are employed in the Triangle now than ever before. "It's kind of an anomaly," he said. "We're still creating jobs, just not at the pace before," despite the unemployment rate.

Thomas White, Trinity '76 and Chamber of Commerce president, said the recent recession had been unusually difficult for North Carolina because in the past, the state has avoided large spikes of unemployment. He said that although the region is still creating jobs, that growth has been counterbalanced by layoffs and plant closings across industries.

State employment and local commerce officials agreed that much of the change in the state's workforce has come through a shift in jobs from the manufacturing sector to the services sector.

"Employment in manufacturing has been going down since the '40s," said Pietro Peretto, an associate professor of economics at Duke. "Production itself is becoming service-intensive."

As the need for lawyers, managers and other service personnel in production has increased, the demand for actual production workers has decreased with growing demand for services. Technological change has likewise limited the need for more production workers, once the base of North Carolina and other state economies.

"It's cheaper to manufacture products in [places like] China and Canada," Walker said, citing cost as yet another reason production is disappearing nationwide. She added that although the decreasing demand for workers is a national trend, it has especially hurt North Carolina, which still has the largest manufacturing employee base in the country.

White said the Triangle has suffered less than many rural areas in the state because it has attracted manufacturing in pharmaceuticals, environmental technology, advanced textiles and the laboratory equipment business.

More locally, White said the new Streets at Southpoint mall has significantly helped the city by adding to sales tax revenue, attracting traveling customers and creating retail sales jobs, providing Durham with a net increase in jobs.

Experts also cautioned not to draw too optimistic a conclusion from the monthly drop. "Monthly drops don't mean much," Peretto said. "You cannot make a statement based on a few little points."

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