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NC jobless rate ticks up but job growth strong

North Carolina’s unemployment rate ticked up slightly in July to 5.9 percent, even as the state added a robust 20,600 jobs during the month.

Unemployment increased from 5.8 percent in June and is up from a low of 5.3 percent earlier this year. The job market data was issued Friday by the Labor & Economic Analysis Division within the N.C. Department of Commerce.

The July data offered differing views on the state of North Carolina’s labor market. While the state added 20,600 jobs, according to a payroll survey of employers, a separate household survey showed that the state’s labor force, which includes the number of people working and looking for work, fell by 8,415 people in July.

It’s not unusual for the two surveys to diverge in a given month, said N.C. State University economist Michael Walden.

He said most economists put more weight in the payroll survey because it is taken from a larger sample size. The household survey, which is conducted by phone, is based on a “tiny sample” and more volatile, Walden said.

“My reading is job growth continues in North Carolina,” he said.

The gap between North Carolina’s jobless rate and the national average is now at its widest point this year, as the U.S. rate remained at 5.3 percent in July.

The recent rise in the state’s unemployment rate is a bit of a mystery, said Mark Vitner, a Wells Fargo economist in Charlotte. One factor could be the population growth occurring in both the Triangle and Charlotte, which is contributing to the state’s labor force expanding by 2.9 percent over the past year.

“The bottom line in North Carolina is we’re seeing very strong job growth in the state’s two largest metropolitan areas and that is pulling in job seekers from other parts of the country, and that may be pushing the unemployment rate up,” Vitner said.

The sectors that recorded the biggest job increases in July were government, which added 7,700 jobs, and other services, which gained 5,000. North Carolina added 1,600 manufacturing jobs in July and has added 12,600 over the past 12 months.

Vitner said North Carolina has added the third most manufacturing jobs over the past 12 months behind only Michigan and Ohio, which have benefited from a resurgent auto industry. Just two sectors – construction and leisure and hospitality – had a decline in jobs in July.

Over the past 12 months, North Carolina added 110,200 jobs, an annual growth rate of 2.7 percent. Walden said North Carolina is adding jobs much faster than the nation, which added jobs at a rate of 2.1 percent over the same period.

Vitner said one danger to the U.S. and North Carolina economies is the slowdown now occurring in China and other emerging markets.

“Exports have been such an important part of the economy over the last few years, it’s one of the things that’s really gone well for us,” he said. “And while China’s not [North Carolina’s] most important trading partner, it’s been one of the fastest growing areas of exports.”

David Bracken: 919-829-4548, @brackendavid

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