The Triangle's unemployment rate jumped to its highest level in 18 months, signaling that an area typically seen as one of the state's strongest job hubs could be heading for another recession - or never recovered from the first.
The region's jobless rate rose to 8.7 percent in August from 8.3 percent in July, according to data released Friday by the N.C. Employment Security Commission and seasonally adjusted by Wells Fargo Securities economists in Charlotte. That's up from 7.9 percent the same time a year ago.
Deep cuts in state and federal spending as well as sluggish job growth in private companies are fueling the rise in unemployment, which is being further worsened by a drop in the size of the labor force, said John Quinterno, a principal at South by North Strategies in Chapel Hill.
"There has been no meaningful improvement in any labor markets over the last year," Quinterno said. "To me, that's very alarming. We hit the floor finally, if you will, and we haven't gotten up in any way, shape or form."
The News & Observer uses adjusted local data to provide better comparisons with the state and national rates, which are adjusted for seasonal factors.
Last week, the ESC reported that state unemployment rate rose to 10.4 percent in August, the state's highest rate in more than a year. The national rate stayed steady at 9.1 percent.
The stagnant job market has sidelined Gary Miller, 62, who has been unemployed for about three months since he was laid off from his position as a plant manager for Handcrafted Homes in Henderson. Miller said he's put in about 50 job applications for other plant management jobs. He has received one call back.
Miller's wife is also unemployed, and the two are trying to decide whether to retire or to continue their job search to help pay for medical insurance, he said.
"This economy, it's going to take awhile to find a job," Miller said. "I won't be discouraged until about another five to six months down the road if I haven't had anything, any solid interviews."
Larry Parker, an ESC spokesman, said the state owes the federal government about $2.5 billion to pay for initial unemployment benefits, and borrowing likely won't end soon. The agency has a $78 million interest payment due the end of the month.
"We're not paying out as much on initial benefits as, say, a year ago, but because we don't have the money in the trust fund, we have to continue to borrow from the federal program," he said. "We're paying down the debt, but we're still borrowing."
In Wake, Durham, Orange and Johnston counties, more than 63,600 people were unemployed last month, the ESC reported, up more than 1,100 workers from July.
Most of the Triangle's job losses came from the public sector and the trade, transportation and utilities industries, which shed a combined 4,400 positions.
Despite this drop, the Triangle is still the best performing out of the state's labor markets. In the past month, the region has netted an increase of about 2,200 jobs, but it isn't enough to meet the needs of people who have restarted their job searches. Wells Fargo senior economist Mark Vitner said the area's job creation numbers are up from last year, though hiring has stagnated in the last three months partially because of uncertainty in the European financial markets.
Mark Staser, 49, was hired this year as a technology business analyst for Rex Hospitals after being unemployed for 16 months after he lost his job with IBM in 2009. He said there is some growth in the Triangle's technology industry, long a key driver in the economy, but there are more workers than there are jobs right now.
"Companies are still looking for cheaper solutions to their personnel needs," he said. "We are still in a recession. Some companies, they don't want to staff up too fast."
Postings of new information technology jobs fell 6.5 percent from July to August, according to the latest survey by the N.C. Technology Association. The 3,440 job openings statewide were down about 25 percent compared to a year ago. "There are a number of signs that the general job market is weakening," the report stated, "and so [is] the IT job market."
Other industries continue to struggle as well.
Contract manufacturer Flextronics, which has operations in Creedmoor, Morrisville and Charlotte, will lay off 83 workers at its facilities in North Carolina over the next several months, according to a notice filed Thursday with the N.C. Department of Commerce. "If you're unemployed or dealing with unemployment," said Quinterno, "this [unemployment data] should make you very concerned because this suggests that the labor market is weak and that if you do wind up unemployed, your odds of going back to work any time soon are limited.
"For those folks who are employed, they should still care about these numbers. It makes it very difficult for employed people to move to a new job. It makes it harder for them to push for raises. It makes it harder for them to improve their benefits in the workplace."
