The state's unemployment rate dropped again last month to its lowest level in a year, but the recovery still has a long way to go.
In May, the state's unemployment rate was 10.3 percent, the N.C. Employment Security Commission reported Friday. That was down from 10.8 percent in April, but still above the national average.
The change is a big improvement, said Mark Vitner, senior economist for Wells Fargo in Charlotte. "It signals that the worst is likely behind us and that the labor markets are improving. But we're not likely to see this same type of improvement over the summer months."
That's because of a number of factors:
More out-of-work people are expected to resume abandoned job searches, temporarily driving up the number of workers who are counted as unemployed in the monthly statistics.
Hiring for the U.S. Census has helped national and state totals, but that is only a temporary boost.
Federal programs such as the first-time home buyer's credit are ending, which may depress the level of economic activity.
And more state employees such as teachers may be laid off as lawmakers look to balance the state's budget.
Another problem North Carolina faces: The state's high proportion of manufacturing jobs, which have been hit hard by the global recession.
"Many of those jobs are in smaller towns and rural areas of the state where there aren't a lot of other jobs for people who lose their job in manufacturing," Vitner said. "We still have a lot of areas of the state where the unemployment rate is still about 15 percent."
The number of people in North Carolina who are employed increased by 14,722 in May, but the number of unemployed workers statewide remains stubbornly high at 472,614.
Even in the Triangle, which has a relatively stable base of employers in health care, education, government and technology, it's hard to see that things are improving.
Jerry Viviano has been out of work since December and has been searching for a job in electrical engineering. At 55, he's an industry veteran with 30 years of experience.
"I'm sure it's much better than it was a year ago, but it sort of goes week by week," said Viviano, who lives inCary and estimates he's applied for more than 100 jobs.
"I feel like it's getting better, and then I'll go two weeks without a good prospect," he said.
In his case, Viviano said, he may have to expand his job search geographically since there are so many engineers in this area who have been laid off.
"This used to be the engineering Mecca, and now it's sort of the engineering sardine can," he said.
Many of the long-term jobless also will face new financial challenges soon unless Congress extends unemployment payments. According to the ESC, about 20,000 workers a week in North Carolina are exhausting their unemployment benefits.
Unfortunately for those people, the economy may be stagnant for awhile, said John Quinterno, principal for South by North Strategies, a Chapel Hill research firm specializing in economic and social policy. Many employers remain reluctant to hire until they see stronger evidence of recovery.
"The second half of 2010 - I think this is going to be avery tumultuous period, and I think when things play out we're really going to have a sense of where we stand," he said.
