North Carolina’s jobless rate fell to 5.8 percent in November, the lowest since May 2008, as the state’s economy gains force in the second half of the year.
The state’s jobless rate fell from 6.3 percent in October and has dropped from 7.4 percent one year ago, even though today’s wages have not caught up to pre-recession pay levels.
North Carolina’s unemployment rate, which has lagged the national average, matched the U.S. rate in November, but the nation as a whole dropped below 6 percent two months ahead of North Carolina.
The job market data was issued Friday by the Labor & Economic Analysis Division within the N.C. Department of Commerce.
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North Carolina gained 16,400 jobs in November and 110,700 in the first 11 months of the year. The last time the state gained jobs at this rate was in 2006, when 129,500 jobs were added.
“Labor demand remains very firm,” said Richard Kaglic, a senior regional economist at the Charlotte Branch of the Richmond Federal Reserve Bank.
On an annual basis, North Carolina has added 106,400 jobs in the 12 months, for an annual growth rate of 2.6 percent, one of the fastest in the country and significantly exceeding the national rate of 2 percent.
“Another thing to notice here is just how broad the gains are,” Kaglic said. “There’s growth everywhere.”
In the past year, every economic sector has gained jobs except government. The biggest gains were in professional and business services, and in trade, transportation and utilities.
North Carolina’s total of nonfarm jobs in November – 4.2 million – is the highest since 1990, according to the Labor & Economic Analysis Division.
“One of the surprises we’re likely to see in 2015 is that the improvement in North Carolina is going to spread beyond the Triangle and Charlotte,” predicted Wells Fargo economist Mark Vitner.
And while the number of employed people increased and the number of unemployed fell, several key statistics have not yet aligned with the rest of the trend.
The state’s labor force shrunk 0.2 percent in November, losing 13,534 people. Over the past year, the labor force has shrunk 0.7 percent, for a reduction of 31,665 people.
A shrinking labor force will drive down the unemployment rate because fewer people are looking for work.
N.C. State University economist Michael Walden said the labor force shrinkage is a national issue caused by a trifecta of factors. Baby boomers are retiring. Students are staying in college longer before entering the workforce.
And job seekers are hampered by a “skill mismatch” that prevents them from finding work. When such people become disaffected and give up looking for work, they contribute to the shrinkage of the state’s labor force.
Walden estimates that the problem of job seekers lacking marketable skills accounts for almost a third of the shrinkage of the national labor force. If those job seekers suddenly flooded the job market, Walden said, North Carolina’s jobless rate would be about 6.8 percent.
Additionally, private sector earnings and household income in the state, adjusted for inflation, are down since 2008.
“People are poorer today than they were on average before the recession,” Walden said.