For the first time since May, North Carolina’s unemployment rate increased last month.
The state’s seasonally adjusted unemployment rate rose to 11 percent in October, after peaking at 11.1 percent in May, according to figures released Friday by the Employment Security Commission of North Carolina. A year ago, North Carolina’s unemployment rate was 7 percent, while the national rate was 6.6 percent.
“The job market is still weak,” said Michael Walden, W.M. Neal Reynolds distinguished professor of economics at North Carolina State University. “The state’s unemployment rate will continue to go higher, probably peaking early next year between 11.3 and 11.6 percent.”
Still, the figures released last week did include some positive indicators, Walden said.
“One piece of good news in this report... is that we actually had an increase in jobs at existing businesses and an increase in jobs in factories and professional and business services,” he said.
John Coleman, a professor at the Fuqua School of Business, said the trend in North Carolina’s unemployment rate indicates that job losses may persist once the recession is over—just as unemployment rose for about 1.5 years following the recessions ending in 1991 and 2001.
He added that employer concerns about the potential for inflation and tax hikes may make them more hesitant to hire new workers.
“Heightened political uncertainty about management of the economy is making employers hold back on hiring plans until some of these other issues are resolved,” Coleman said.
Larry Parker, public relations officer at the ESC, noted that fluctuations in North Carolina’s unemployment rate since February have been minor. In the same period, the national unemployment rate has risen from 8.1 to 10.2 percent, while North Carolina’s has increased from 10.7 to 11 percent.
“We’ve been fairly steady,” he said.
Since a year ago, North Carolina’s economy has lost 185,800 non-farm jobs, according to the ESC. The federal government’s stimulus package is projected to create 105,000 jobs in the state over three years.
So far, 28,073 jobs have been created in North Carolina, the fifth highest number of jobs created in any state by the stimulus.
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Cathy Akroyd, communications director for the North Carolina Office of Economic Recovery and Investment, wrote in an e-mail that the state is on track to create all 105,000 jobs.
“We can expect [the projection to be met] by the end of the three year process. That has always been the plan,” she wrote.
A little more than a quarter of the stimulus money awarded in the state has already been received, and Akroyd said most of the stimulus funds will be spent in the second year.
As the stimulus money is spent, state officials urge patience.
“As things turn around, people start coming back to the labor force,” Parker said. “Not everyone gets a job right away.”