North Carolina’s unemployment rate dropped a notch to 4.6 percent in August, the lowest it’s been since April 2007.
Despite that decline, however, the seasonally adjusted unemployment and jobs data released Tuesday by the state Department of Commerce sent a mixed message. The number of jobless people fell, but the number of people employed also declined.
Economists consider the estimated number of jobs numbers gleaned from a survey of businesses more reliable than the unemployment data obtained by surveying households because the former is based on a larger sample size.
“North Carolina’s numbers certainly didn’t look good on the face of things,” said Richard Kaglic, an economist in the Charlotte branch of the Federal Reserve Bank of Richmond, who noted that the number of nonfarm jobs fell by 14,100 during the month.
“But there is a big caveat here,” he said. “Most of that loss was in the government sector. Government sector employment ... tends to be quite volatile during the May and June time frame and the July and August time frame” in conjunction with the end and the beginning of the school year.
The number of government jobs fell by 11,000 in August.
Moreover, the overall decline in jobs followed two months of robust gains. Consequently, said Kaglic, “I don’t think it’s anything to be excited about.”
On the plus side, 1,900 jobs were added in the education and health services sector, and 1,400 manufacturing jobs were added in August. And, Kaglic said, over the past 12 months, the number of jobs in North Carolina has expanded by 1.8 percent, outpacing the 1.7 percent gain nationwide.
With the drop in the unemployment rate from 4.7 percent in July to 4.6 percent last month, the state’s jobless rate was below the national rate for the second consecutive month. Nationwide, the unemployment rate remained unchanged at 4.9 percent in August.
A year ago, the state’s unemployment rate was 5.7 percent.
The decline in the state’s unemployment rate last month was driven by a drop in the size of the labor force, which includes both employed workers plus those who are actively seeking jobs.
“I don’t make a whole lot of that,” Kaglic said. “We have seen this kind of thing play out over the last two years where the labor force estimates show big increases between January and May and then in the second half of the year they move around and turn in the other direction. It’s something I expected to see.”
Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, characterized the monthly report as “a little confounding,” given that both employment and the unemployment rate fell.
Still, he said, “We feel pretty good about the employment outlook, even though the report raises as many questions as it answers.”
“Just traveling around the state,” he continued, “you can see the improvement taking place in the economy. There is more construction activity. Homebuilding seems to be gaining momentum. The tech sector is still going strong.”