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NC jobless rate rises for third consecutive month during October; more job cuts, more labor force exits prime reasons

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Filing for Unemployment in NC

North Carolina’s unemployment rate increased for the third consecutive month during October.

North Carolina’s unemployment rate increased for the third consecutive month during October, this time influenced by both new rounds of job cuts and more individuals voluntarily leaving the state’s workforce.

The N.C. Department of Commerce reported Friday the jobless rate was at 3.8%, compared with 3.6 in September and 3.5% in August.

The 0.2 percentage point increase, while small, is the largest month-over-month increase in the state’s jobless rate since September 2020.

The rate had been at 3.4% for four consecutive months, which represented the monthly low for the COVID-19 pandemic period.

By comparison, the jobless rate was 3.9% in March 2020, the last report before the brunt of the pandemic began to be fully experienced.

Most economists consider full employment at 5% — the point at which everyone who wants a job has one, employers have the skilled workers they need, and there is limited inflationary pressure on wages.

Unlike the April through August monthly reports, when hiring has exceeded the dropout totals, there was a 10,310 decline in those considered as employed during October to 4.93 million North Carolinians.

Meanwhile, 9,944 more North Carolinians were listed as unemployed from September for a total of 194,125.

People who are not actively looking for work are counted as part of the labor force, but excluded from the calculations for determining the state, metropolitan statistical and county-level jobless rates.

Taking a year-over-year look, the state’s labor force is up 2.8%, or from just under 5 million to 5.13 million. That represents a net gain of 154,352 listed as employed and 23,846 no longer listed as unemployed.

Employer survey

In the monthly employer survey, the state is up 6,000 private-sector jobs from September to October after increasing by 17,400 from August to September.

Those totals can reflect individuals gaining one or more part-time jobs.

Meanwhile, there was a gain of 2,300 government jobs after a decline of 2,200 in the September report.

There were mixed hiring trends again within the 10 private-sector employment categories.

The biggest net gain was 4,900 in professional and business services, along with 2,600 in education and health services, 2,300 in other services, 1,900 in manufacturing and 1,300 in trade, transportation and utilities.

Meanwhile, there was a loss of 6,300 lower-wage leisure and hospitality services jobs following a 10,300 gain the previous report, along with 1,100 in financial activities.

Year over year, the state is up 184,100 private-sector jobs and up 10,800 government jobs from October 2021.

The biggest year-over-year gains were 60,700 in professional and business services, along with 32,200 in leisure and hospitality, 31,800 in education and health services, 13,600 in trade, transportation and utilities, 12,700 in manufacturing, 11,600 in construction, 9,400 in financial activities, 8,800 in other services and 3,100 in information technology.

Michael Walden, an economics professor at N.C. State University, said the October jobless report reflects “a tale of two job reports going in the opposite directions” in regards to the nearly equal number of job cuts and people leaving the work force.

“Combining the two surveys and using their results literally, the reports are saying fewer households are working, but those that are working are holding more jobs,” Walden said.

“If accurate, this interpretation could be taken as a sign of distress. Fewer people hold jobs, but for those that do have jobs, more have multiple jobs perhaps to earn more income to keep up with rising prices.

“This would not be a good sign.”

The state’s labor force data does not distinguish how many workers are full time, temporary or part time, or how many jobs people are working.

The U.S. Labor Department’s U6 Index does include those individuals.

The state’s U6 jobless rate was 7.1% in September, while the U.S. rate was 6.8% in October. U.S. Labor typically updates the state U6 rates on a quarterly basis.

Responses

Gus Faucher, chief economist for PNC Financial Services Group, said the labor market “has softened slightly in North Carolina over the past few months with weaker job growth.”

“Part of the problem is that the state’s very tight job market has made it difficult for businesses to hire. Slightly higher unemployment may make it easier for businesses to find workers and encourage hiring.

“As of now, the state’s job market is still very strong, although not quite as strong as it was a few months ago,” Faucher said. “But the North Carolina labor market will weaken further in 2023, as national economic growth slows and the U.S. economy likely falls into recession.”

Patrick McHugh, research manager with left-leaning N.C. Budget and Tax Center, cautioned that state government continues to struggle to fill vacancies.

“A lack of pay raises is pushing people out of public service and making it really hard for many agencies to fill open positions,” McHugh said.

“It’s creating a hardship for state employees, their families, and for communities that rely on the services they provide.”

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