North Carolina’s jobless rate dipped to 5.5 percent in December, hitting its lowest point since April 2008 as the state’s job market speeds toward its pre-recession condition.
December’s unemployment rate in North Carolina fell from 5.9 percent in November and dropped from 6.9 percent a year ago.
It also fell below the national average of 5.6 percent. Traditionally North Carolina has had worse unemployment than the national average during economic downturns, but the state’s job market is better than the national average during periods of economic growth.
The job market data was issued Tuesday by the Labor & Economic Analysis Division within the N.C. Department of Commerce.
“The good news just keeps coming,” said Richard Kaglic, a senior regional economist at the Charlotte Branch of the Richmond Federal Reserve Bank.
The data show that the state has gained 114,500 non-farm jobs, an expansion rate economists said would be necessary to chip away at the jobless rate. North Carolina’s annual job growth rate was 2.8 percent over the past year, compared with the national average of 2.1 percent.
But not everyone is celebrating. John Quinterno, principal at South by North Strategies, a research firm in Chapel Hill, noted that North Carolina had a mere 50,700 more jobs last month than in December 2007, when the national recession began.
He also said that North Carolina’s labor force participation rate was 59.8 percent, the lowest monthly rate since January 1976, when data tracking began. The rate reflects the percentage of people of working age who are either working or looking for work.
“The bottom line is, we haven’t created very many jobs in the big picture over the last seven years,” Quinterno said. “In many ways what we’re seeing is people dialing down their expectations to accept a slower-growing economy that tolerates higher levels of joblessness.”
According to Tuesday’s data, every job sector in North Carolina expanded in the past year except government. The biggest gainers were construction; trade, transportation and utilities; financial activities; professional and business services; and leisure and hospitality.
Professional and business services added 40,200 jobs in North Carolina in the past 12 months, accounting for more than a third of the state’s jobs gains. The sector expanded by 7.1 percent in the past year, compared with the national average of 3.9 percent.
North Carolina’s construction industry, battered by the recession, added 12,500 jobs in the past year, a growth spurt of 7.2 percent. The national average was 4.9 percent.
Financial activities added 8,100 jobs, growing at a rate of 3.9 percent, more than doubling the national average of 1.5 percent.
“These are big differences,” Kaglic said. “It adds an element of sustainability. Here we got all ships rising with the tide.”
However, one sore spot remains in the state’s economy. The labor force shrunk by 14,560 people in December and has contracted by 42,245 people in the past year.
A shrinking labor force artificially lowers the jobless rate because fewer people are looking for work.
The shrinkage of the labor force is not limited to North Carolina and is a national phenomenon. It’s attributed to dispirited job seekers, such as displaced middle-aged people, as well as to a wave of retirements among baby boomers and students staying in college longer to weather out economic uncertainty.
North Carolina’s jobless rate peaked at 11.3 percent during the recession five years ago.