The Triangle’s unemployment rate rose in January, halting a streak of three consecutive months that saw the jobless rate decline.
The unemployment rate in January was 4.9 percent, up from a revised rate of 4.6 percent on a seasonally adjusted basis, according to data released Friday. The data was issued by the state Division of Employment Security and seasonally adjusted by Wells Fargo.
Given the unemployment rate’s recent decline, an uptick in January wasn’t a surprise, said Wells Fargo economist Mark Vitner. Nor, he said, is it cause for concern.
“I don’t think it marks a turning point,” Vitner said. “The unemployment rate is simply not that precise on a month-to-month basis. We shouldn’t make too much of this little uptick.”
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The important thing, said Vitner, is that the unemployment rate is below the 5 percent mark that economists consider “full employment.” The local unemployment rate has been below 5 percent since October; previously, it hadn’t been that low since mid-2008.
The state’s unemployment rate in January was unchanged at 5.4 percent, below the national rate of 5.7 percent.
N.C. State University economist Michael Walden said that several factors make it especially difficult to interpret January unemployment numbers, including the fact that retailers that temporarily beefed up their workforce for the holidays cut back in January.
Although seasonally adjusting the data aims at accounting for those types of fluctuations, “that adjustment isn’t necessarily perfect,” Walden said.
Overall, “I think we are still on the path of improving in the Triangle,” Walden said. He expects the local unemployment rate will decline to the “low 4s,” percentage-wise, by the end of this year.
Vitner shares that optimism, predicting that the region will add more jobs this year than it did last year. But he doesn’t expect as big a drop in the Triangle’s unemployment rate, projecting that it will end the year in the neighborhood of 4.5 percent.
“I do think we have moved past a critical threshold in the recovery where more and more people recognize that the labor market has strengthened and, if they dropped out of the workforce, it’s a good time to come back in,” Vitner said.
In the Triangle, sectors “that had long been languishing” such as construction and manufacturing are now on the upswing and attracting new job seekers, Vitner said. That would have a negative impact on the unemployment rate.
Jobless workers who are so discouraged that they give up looking for a job aren’t considered unemployed by government statisticians, producing a lower unemployment rate. Conversely, when the job market picks up and those discouraged workers resume their job hunt, that influx of people into the workforce pushes the unemployment rate higher.
The Triangle added 25,900 jobs in 2014.
“This year I think it will be a little bit stronger than that, between 25,000 and 30,000 jobs,” Vitner said.
Economists such as Vitner don’t rely solely on statistics when making projections. Vitner said he was in Raleigh’s Glenwood South entertainment district on Tuesday night, and it reinforced his view of the Triangle economy.
“I can tell you that all the bars and restaurants seemed to be doing very well,” he said.