North Carolina’s unemployment rate inched up a notch in January and, in a departure from recent months, the state also experienced a significant decline in nonfarm jobs.
The N.C. Department of Commerce reported Monday that the state’s unemployment rate for January rose to 5.3 percent, one-tenth of a percentage point higher than December’s revised rate of 5.2 percent. December’s rate was initially reported in late January as 5.1 percent.
The state’s unemployment rate for January is unchanged from a year ago and is higher than the national unemployment rate of 4.8 percent.
N.C. State University economist Michael Walden labeled the January data as a disappointment given that, in contrast to the state’s job numbers, nonfarm jobs grew at the national level during the month.
Richard Kaglic, an economist with the Federal Reserve Bank of Richmond, said the loss of 6,600 jobs in the state during the month, based on a survey of employers, was “squirrely.”
“It flies in the face of everything I’m hearing from business people I’ve talked to across the state, and I have talked to a lot of them over the course of the past two months or so,” Kaglic said.
“Every indication is that labor demand remains very firm in the state, and labor supply is relatively short,” he added.
The number of government jobs fell by 5,200 during the month and manufacturing jobs declined by 4,700 even though there were no major plant closings or layoffs during the month.
Kaglic speculated that the decline in government jobs “may be a statistical anomaly. ... I think you could see a big bounce back in that number” when February data is released.
On the plus side, the trade, transportation and utilities sector added 1,800 jobs and 1,700 financial activities jobs were added during the month.
Over the past 12 months, the state has added 79,200 nonfarm jobs. That’s a growth rate of 1.8 percent, outpacing the national job growth rate of 1.6 percent during that span, Kaglic said.
The slight increase in the unemployment rate was driven in part by an increase in the labor force, which rose by 2.1 percent, or more than 14,500 people, during the month. The labor force includes both those who have jobs plus those who are actively seeking work, and tends to rise as people who were too discouraged to seek a job start looking again.
“In the short term, it keeps your unemployment rate elevated,” Kaglic said of the growing labor force. “But in the longer term it bodes well for economic growth potential” because there is a larger pool of people to fill job vacancies.