The Triangle’s jobless rate remained unchanged in January for a third consecutive month, a sign of the economy’s painstakingly s-l-o-w recovery rate.
The unemployment rate in the Triangle clocked in once again at 7.7 percent in January, according to data issued by the state Commerce Department’s labor and economic analysis division and seasonally adjusted by Wells Fargo in Charlotte.
Wells Fargo economist Mark Vitner said that although the Triangle has been adding jobs, the unemployment rate has been stuck because of an influx of workers from elsewhere – including the northern states and rural North Carolina and South Carolina – who come looking for jobs.
To be sure, the Triangle is faring much better than the state as a whole. North Carolina’s unemployment rate rose one-tenth of a percentage point to 9.5 percent in January. In Charlotte the unemployment rate rose from 9.4 to 9.6 percent.
The Triangle’s job market also is out-performing the nation. The nationwide unemployment rate is 7.7 percent.
However, Vitner doesn’t expect much improvement in the Triangle’s jobless rate the rest of this year.
“The big improvements in the unemployment rate may be behind us,” Vitner said. “We think we’re going to have to grind out small improvements in the next couple of years.”
Vitner forecasts that the Triangle unemployment rate will drop just a few tenths of a percentage point this year, ending the year at 7.4 percent.
“With the economy picking up, some of the people who gave up looking for work are coming back in” to the labor force, he said. “Folks that went and got retrained are coming back in.” A larger labor force has a negative impact on the unemployment rate.
Another factor likely to drive people back into the labor force this year, Vitner said, is the cutback in unemployment benefits that goes into effect in North Carolina as of July 1. Last month, Gov. Pat McCrory signed a law that cuts maximum benefits paid to unemployed workers by roughly one-third, reduces the maximum weeks of benefits and cuts off extra federal benefits for unemployed workers.
Vitner said the resurgence in the labor force conceivably could outpace the Triangle’s job growth, resulting in an uptick in the unemployment rate.
In January, the Triangle added just 700 jobs on a seasonally adjusted basis, down from 1,400 in December. Last year the Triangle added 20,000 jobs according to revised figures released Friday, up from 13,000 in 2011.
But Michael Walden, an economist at N.C. State University, wasn’t dismayed by the anemic January job numbers – and was much more upbeat about the area’s prospects than Vitner.
“Month-to-month changes don’t tell you very much,” Walden said. “I think this area is on track to do very well this year and next year in terms of job growth.”
Walden projects that the Triangle could add as many 30,000 jobs this year and that the region’s unemployment rate could dip below 6 percent this year.
“We’re very attractive for businesses, as evidenced by MetLife coming here looking for knowledge-based employees, looking for competitive costs, looking for a pleasant climate,” Walden said. “That is going to help.”
New York-based MetLife announced earlier this month that it plans to establish a hub for its global technology and operations unit in Cary, where it expects to create about 1,300 jobs over the next three years. The insurance giant also plans to add a like number of jobs in Charlotte, where it is establishing a hub for its U.S. retail business.