North Carolina’s unemployment rate remained unchanged for a second consecutive month and yet, paradoxically, it also improved.
The Labor and Economic Analysis Division of the N.C. Department of Commerce reported Friday that the state’s unemployment rate was 5.3 percent in February, which was unchanged from January’s newly revised rate. However, January’s rate was originally reported as 5.4 percent, so February’s 5.3 percent rate has the look and feel of an improvement.
A year ago, North Carolina’s unemployment rate stood at 6.5 percent.
The last time the state’s jobless was 5.3 percent was March of 2008, said economist Richard Kaglic of the Federal Reserve Bank of Richmond.
“This is a very strong report for North Carolina,” Kaglic said. “Things are looking very good in North Carolina relative to what is happening in the rest of the nation. And things ... in the rest of the nation are going very well as well.”
The national unemployment rate decreased two-tenths of a percentage point to 5.5 percent in February, or two-tenths of a percentage point above North Carolina’s jobless rate.
North Carolina added 16,800 jobs in February. The gains were led by a jump of 7,400 education and health services jobs, followed by a 7,300 increase in the trade, transportation and utilities sector and 3,900 construction jobs.
“That’s a reflection of what we are seeing in the economy,” Kaglic said. “We see jobs being created in construction because construction activity is picking up. We see jobs being created in leisure and hospitality because people are spending more money.”
Kaglic noted that although the initial data for January showed that the state didn’t add any jobs, the revised data issued Friday showed an increase of 1,500 jobs for the month. That makes February’s growth that much stronger because it was “on top of a higher base than we thought.”
“Job growth ... has been very strong in the first two months of the year,” he said.
Despite robust job growth in February, the unemployment rate didn’t fall compared to January because the labor force – which includes both employed and unemployed workers – rose by 30,388 jobs. That indicates that more unemployed workers are actively seeking work; jobless workers who are so discouraged that they’re not looking for a job aren’t considered unemployed.
However, the increase in the labor force isn’t a negative. Kaglic said an improving economy provides an incentive for people to come out and look for a job. “So you want a healthy, growing (labor) force,” he said.
Kaglic is upbeat about North Carolina’s economy going forward, in part because the Federal Reserve Bank of Richmond’s latest monthly survey of businesses in the Carolinas, issued Thursday, found them to be “very optimistic about the outlook for 2015. And, more importantly, they are very optimistic about their hiring plans.”
Still, Kaglic noted that North Carolina’s unemployment rate has a ways to go to match the pre-recession low of 4.6 percent.
“We’re not sure that 4.6 percent is attainable in the near-term but ... everything seems to be moving in the right direction,” he said.
Kaglic doesn’t make forecasts on the unemployment rate, but N.C. State University economist Michael Walden does.
“We’ll end the year somewhere in the high 4’s or the low 5’s,” Walden said. “The high 4’s, 4.7 percent, 4.8 percent, is certainly doable.”
John Quinterno of South by North Strategies, a Chapel Hill firm specializing in economic and social policy, cautioned against reading too much into the positive trends of recent jobs reports.
None of the data “suggests that the state’s labor market has heated up or is rocking and rolling or sizzling or whatever word you want to use,” Quinterno said.
He noted that although the state now has 53,500, or 1.3 percent, more jobs than it had in December 2007 when the recession began, “we still haven’t put a dent in all the jobs we should have created but didn’t” during the recession.