More workers seek elusive jobs

They come to N.C. to work, but employment picture continues to weaken

Workers and employers apparently have different views of the North Carolina economy.

Last month, the number of people wanting to work in the state -- a measure of worker optimism -- rose by 5,988, according to data released Friday by the N.C. Employment Security Commission.

Employers, though, were not nearly so optimistic. Established businesses cut 5,400 jobs in October.

"Things have weakened here," said Mark Vitner, an economist with Wachovia in Charlotte. There's "a little bit of a recognition lag on the part of job seekers."

It's not necessarily their fault. This state for years was on a tear, recruiting new jobs from companies such as Google, Merck and Novartis. That brought attention from outside North Carolina, landing the state on lists of top places to live and contributing to a rapid rise in population.

Workers who have had difficulties in other places are still coming here, believing their luck could be better.

In general, it's not.

"Events in financial markets at the national level have been significant enough that they've swamped the regional differences we usually talk about," said Matthew Martin, an economist who follows North Carolina for the Federal Reserve Bank of Richmond. "There's been a broad weakening across the country."

Unemployment in North Carolina rose to 7 percent in October, according to the Employment Security Commission. That's up from a revised 6.9 percent in September and above the national average of 6.5 percent last month.

Since last November, unemployment in North Carolina has climbed by 2.3 percentage points. Vitner said about half of that increase is due to layoffs and the other half has been caused by increases in the labor force. When the labor force rises, it takes more jobs to keep the jobless rate steady.

"Eventually, the increase in the unemployment rate will taper off because folks will begin to realize, 'Gosh, the economy has tapered off,' " Vitner said. The labor force will grow more slowly or possibly contract.

Don't look for joblessness to level off in the short term, though. Several layoff announcements that have made headlines in recent weeks won't take effect until the end of the year. They could drive unemployment up in November or December.

Indeed, one economist, Mike Walden at N.C. State University, has said the unemployment rate could reach 10 percent in North Carolina before a recovery. Sectors feeling the most pain right now include manufacturing and financial services. Those logging growth include health care and hospitality.

Many economists predict it will be the middle of next year or 2010 before the economy starts rebounding.

That might not be very meaningful, though, because it takes time for the effects to take hold.

"If you're asking, 'When are we going to feel better about the economy?' " Vitner said. "It may be 2011."