The Triangle unemployment rate dropped a notch to 5.3 percent in January despite a decline in the number of jobs.
The unemployment rate dropped one-tenth of a percentage point in January, according to local figures released Friday by the N.C. Department of Commerce and seasonally adjusted by Wells Fargo. The Triangle unemployment rate for December previously was reported at 5.3 percent as well but has been revised to 5.4 percent.
The region’s unemployment rate hasn’t been this low since August 2008, before the global economy went into a tailspin. And it’s well below the state unemployment rate of 6.7 percent.
However, the number of jobs in the Triangle fell by 4,100 in January.
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A discrepancy between the unemployment rate and the jobs numbers isn’t unusual, given that they come from different surveys. The unemployment rate is based on a series of household interviews, while job numbers are based on surveys of employers. Both numbers are estimates based on sampling.
Also, jobless workers who are so discouraged that they stop looking for a job aren’t counted as unemployed when the unemployment rate is calculated.
Mark Vitner, an economist with Wells Fargo, cautioned not to read too much into the decline in jobs in January, which was triggered by the loss of 4,600 retail jobs.
For one thing, he said, seasonally adjusting the job numbers can actually exaggerate movement if it exceeds the norm. That probably happened this year in the retail sector.
“There’s no doubt that retail had a difficult holiday season,” Vitner said. “We had some store closings after the holiday season. And it is very well possible that layoffs were greater than years past.”
But that doesn’t speak to the overall health of the economy. “It’s kind of a one-off,” Vitner said.
“From a longer-term perspective, the Triangle is in really good shape,” Vitner said. “We are continuing to add jobs in the professional and technical services, we’re adding jobs in the tech sector, and we’re seeing a rebound in residential and commercial construction.”
But the uptick in construction will make it harder to move the unemployment rate needle going forward, he said.
Previously, some workers in construction who didn’t have a lot of viable employment options dropped out of the labor force altogether, which helped reduce the unemployment rate. With the construction market improving they’re likely to start looking for a job once again, so they would be considered unemployed.
Vitner expects the Triangle’s unemployment rate to fall to between 4.5 percent and 5 percent over the next 12 months.
Meanwhile, the number of jobs created in the Triangle in 2013 was revised upward – from the 19,300 reported previously to 21,200. The number of jobs created in 2012 was revised upward as well, from roughly 20,000 to 21,600.
Michael Walden, an economist at N.C. State University, expects that 2014 will be a better year for jobs. He projects that the local economy could add 25,000 jobs this year.
“We have the exact kind of economy here in the Triangle that you need to have in the 21st century to succeed,” he said.