North Carolina’s unemployment rate rose a notch to 5.4 percent in March as tens of thousands of people entered the labor force in search of work.
The Labor and Economic Division of the N.C. Department of Commerce reported Tuesday that the unemployment rate rose one-tenth of a percentage point from 5.3 percent in February. A year ago, the state’s unemployment rate stood at 6.4 percent.
The national unemployment rate was 5.5 percent in March, the same as it was in February.
“I would ignore the rise in the (state) unemployment rate because it is totally due to a large influx of people coming back to the labor force,” said N.C. State University economist Michael Walden.
The monthly survey of households found that the number of people employed rose by 26,012, which Walden called “a very strong increase.” At the same time, however, the number of people unemployed in the state rose by 5,926 in March to 253,510.
That seemingly contradictory data is an indication that people who previously had been too discouraged to look for work have re-entered the job market. That in turn swells the ranks of the jobless because people aren’t counted as unemployed unless they’re actively seeking work.
The monthly survey of North Carolina employers actually found that the number of jobs in the state fell by 2,600. It’s not unusual for the data from the household survey and the employer survey to conflict, since both are based on sampling.
Many economists, including Walden, have greater confidence in the employer survey data because the sample size is larger. But given that the 26,000 jump in employment derived from the household survey was so large and the decline in jobs from the employers’ survey was relatively small, Walden rated the state’s overall economic picture in March “above average.”
The month-over-month decline in jobs in March, according to the employer survey, was led by a loss of 2,400 construction jobs and 1,800 financial activities jobs. Other sectors losing jobs included education and health services and government, both of which declined by 1,100 jobs.
On the upside, the state added 2,700 professional and business services jobs and 2,100 jobs in the trade, transportation and utilities sector. Manufacturing jobs grew by 1,000.
Over the past year, the state has added 113,700 jobs, led by a jump of 32,900 in professional and business services.
“We are growing so much faster than the nation,” said Wells Fargo economist Mark Vitner, who is based in Charlotte. “We are seeing significant job growth across virtually every industry.”
Vitner gives much more weight to the state’s year-over-year job growth because, he said, “there is a lot of volatility on a month-to-month basis.”
North Carolina’s labor force has been growing so fast over the past year – three times faster than the nation as a whole – that “it will make it tougher to reduce the unemployment rate further,” Vitner said.
Still, he expects the state’s unemployment rate at the end of the year will be below 5 percent.
Vitner sees the increase in the labor force as a plus.
“Folks that were only reading about the economic recovery earlier are now getting to see it and experience it for themselves,” he said.
But John Quinterno of South by North Strategies, a Chapel Hill firm specializing in economic and social policy, noted that North Carolina currently boasts just 51,600 more jobs, an increase of 1.2 percent, than it did prior to the recession.
“We really aren’t where we need to be,” Quinterno said.
The Triangle’s seasonally adjusted unemployment rate was 4.9 percent in February. The local unemployment numbers for March are scheduled to be released April 29.