The Triangle’s jobless rate fell six-tenths of a percentage point to 5.8 percent in November, a precipitous decline that pushed the rate to its lowest level since October 2008.
The decline is good news but probably overstates the improvement in the local economy, said Mark Vitner, a Wells Fargo economist.
Vitner thinks a key factor in the declining jobless rate is long-term unemployed workers taking jobs they wouldn’t have accepted otherwise, including part-time work, because they have exhausted both their unemployment benefits and savings.
“It’s a meaningful change that we have seen people go from receiving unemployment benefits to working part time,” Vitner said. “It’s not a success story though.”
Changes in North Carolina’s unemployment benefit system that took effect in July triggered an end to extended, federally funded jobless benefits in the state. That affected about 70,000 unemployed workers who had already exhausted their state-funded benefits.
Vitner and Mike Walden, an economist at N.C. State University, see positives in the Triangle economy, including a pickup in housing sales, an increase in home prices, an uptick in commercial construction and a thriving tech sector.
“We’re back above the (pre-recession) job numbers,” said Walden. “The cranes are out. People are upbeat again.”
The local unemployment figures for November were released by the N.C. Department of Commerce on Tuesday and seasonally adjusted by Wells Fargo.
The decline in the Triangle jobless rate came despite a loss of 1,800 jobs in November, which isn’t that unusual but is counterintuitive.
The discrepancy stems from the way the numbers are collected. The unemployment rate is based on a series of household interviews, while job numbers are based on surveys of employers.
The discrepancy can work both ways. In October, the Triangle’s unemployment rate remained flat even though the region boasted a gain of 6,000 jobs.
“We had a big job gain in October, and we gave some of that back in November,” Walden said. “Month-to-month change is hard to predict and oftentimes hard to explain.”
That’s especially so because the job numbers are estimates based on surveys, he added.
For the first 11 months of this year, revised and seasonally adjusted numbers show that the Triangle added 16,100 jobs.
Vitner anticipates that next month’s release of December data will show that the Triangle added 18,000 jobs in 2013, down from the gain of roughly 20,000 jobs in 2012.
Vitner projects that by the end of this year, the Triangle’s jobless rate could hover around 5 percent.
That estimate, however, is based on there being no change in unemployment benefits for North Carolina’s jobless.
If Congress agrees to restore extended unemployment benefits and also decides to make those benefits available in North Carolina, Vitner said, the Triangle’s unemployment rate is likely to rise a little bit this year.
Although a 5 percent unemployment rate would be welcome, “we’ve been much lower,” Walden noted. In the 1990s, the Triangle’s jobless rate fell below 2 percent.