North Carolina’s economy, at least by one key indicator, appears to be progressing at a level that hasn’t been seen since the national downturn began in 2008.
The state’s unemployment rate continued its yearlong decline during October, dropping 0.3 percentage points to 8 percent, the N.C. Commerce Department reported Friday.
The jobless report also includes the September data, which was not released last month as a byproduct of the federal government shutdown. Unemployment in September was 8.3 percent, down from 8.7 percent in August.
The rate has fallen to its lowest level since the state began to experience the full effect of the economic downturn in December 2008, when the rate was 8.1 percent.
With the 0.3 percentage-point month-over-month decrease, North Carolina dropped from having the third-highest unemployment rate in the country in July to the 10th highest in October.
“I believe that the 0.7 percentage point drop in the unemployment rate in North Carolina over the past two months is a sure sign that economic growth is gaining momentum,” said Mark Vitner, a senior economist with Wells Fargo Securities.
According to U.S. Labor data, North Carolina’s net gain of 22,200 jobs from September to October was the third highest in the nation. The year-over-year net gain of 80,100 jobs was sixth highest.
“The drop to 8.0 percent marks a dramatic improvement,” Vitner said. “North Carolina no longer has the highest unemployment rate in the Southeast, and the gap between North Carolina’s unemployment rate and the nation has narrowed considerably since the start of the year.”
The national jobless rate for October was 7.3 percent, up 0.1 percentage point from September.
“The bottom line is that North Carolina is now growing faster than the nation for the first time since the recession ended back in 2009,” Vitner said.
As has been the case in recent months, the two surveys that Commerce uses to determine the statewide job market yielded different pictures.
Which survey represents the best employment pictures often depends on the analyst or economist surveyed.
For October, according to the monthly employer survey of 11 job sectors, the state had a net gain of 16,000 private-sector jobs, led by 7,600 in education and health services, 6,400 in professional and business services and 2,400 in manufacturing. It also had a loss of 4,200 jobs in the financial activities sector and 500 in construction.
There also was a net gain of 6,200 government jobs. Those numbers are seasonally adjusted. The data do not account for people having two or more full- or part-time jobs.
In the monthly household employment survey, also seasonally adjusted, the state’s labor force dropped by 12,317 — 18,542 fewer North Carolinians listed as unemployed and a 6,225 gain in those listed as employed.
Michael Walden, an economics professor at N.C. State University, said he puts more stock in the employer survey. Walden has said his main employment concern is that the job growth has been mostly at the two ends of the pay spectrum — high-paying jobs and low-paying jobs.
The traditional jobless rate does not include several categories of people, including those who have stopped looking for work, are retired, are underemployed for their work skills, are able to work full time but can only get part-time work, or are receiving a severance package after the elimination of their job.
A rate compiled by the U.S. Bureau of Labor Statistics, the U6 index, includes those categories. The latest update for North Carolina found 15.6 percent of adults without jobs as of June 30 — the latest available — compared with 13.8 percent nationally on Oct. 31.
Mekael Teshome, an economist with PNC Financial Services Corp., said the most important aspect of the October employment report is the job creation.
However, he cautioned the higher number of people dropping out of the job market “led to a faster drop in the rate than expected.”
“The fear with the federal government shutdown was that it could curb employers’ interest in hiring,” Teshome said. “What the October report shows is that the economy has shrugged off the shutdown, and 2014 should have persistent, moderate job growth.”
John Quinterno, a principal with research firm South by North Strategies, Ltd., said North Carolina’s labor market has experienced “few meaningful improvements” since August.
“Although the state experienced some job growth and saw a sharp drop in the unemployment rate, the decline in unemployment was attributable largely to people leaving the labor force rather than finding jobs,” Quinterno said.
“A tremendous amount of labor in North Carolina simply is sitting idle due to a lack of demand.”