State jobless rate dips to 3.7% in March as more people exit work force

North Carolina experienced in March another month of minimal job market movement for seekers and employers with the unemployment rate dripping slightly to 3.7%, the state Commerce Department reported Wednesday.

Still, at 3.7% it is the lowest monthly rate for the state since December 2024.

The number of North Carolinians in the work force dropped by 7,043 from February to March - representing 3,097 fewer employed workers and 3,946 fewer individuals listed as newly unemployed and looking for work.

People who have paused or stopped looking for work are not counted toward the unemployment rate.

Year over year, the state's labor force is up by just 14,562. That represents a gain of 18,671 individuals listed as employed and a decrease of 4,109 of those considered unemployed and looking for work.

The state's monthly survey of N.C. employers offered a less gloomy economic picture.

There was a gain of 9,400 private-sector jobs from February, along with a net gain of 200 government jobs.

The biggest net hiring positive was the trade, transportation and utilities sectors at 4,600, followed by a 2,200 rebound in manufacturing, 800 in construction and 700 in financial activities.

Manufacturing job losses have been acutely felt in the Triad with at least 12 plant closing announcements since the start of 2025. At least 1,330 jobs were lost in those announcements.

Meanwhile, there was just a 200 net gain in the private education and health services category following a 2,700 month-over-month gain in February and 4,900 in January.

Over the past year, the state has had a net gain of 39,200 private-sector and 5,300 government jobs.

Private sector hiring was led by 21,000 in private education and health services, followed by 11,300 in construction and 8,200 in the lower-wage leisure and hospitality services.

Meanwhile, there was an overall loss of 9,800 manufacturing jobs and 2,600 in information technology.

"Manufacturing has been soft, as businesses have had to navigate the tariff turmoil, and folks are maintaining low inventories," said Mark Vitner, chief economist with Piedmont Crescent Capital.

Economists cautioned that the January through March state jobless rates are not reflecting the February outbreak of the U.S. war against Iran and the spillover effect on the U.S. and state economies.

"With the war's likely adverse impacts on prices, inflation and uncertainty, it is likely future reports will not be as upbeat," said Michael Walden, a retired N.C. State economics professor.

"At the beginning of 2026 most economists, including me, were predicting a reasonably decent year for both businesses and households."

Walden cautioned that economists "are busy recalibrating their models and trying to access what economic impacts the conflict will have."

"It seems to be clear that the conflict will have negative impacts. The questions are how negative and what that bad news will entail."

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