Triad unemployment rate increases to 9.1 percent
WINSTON-SALEM, N.C. (Winston-Salem Journal) — The Triad’s unemployment rate took another climb on its recent roller coaster ride during May, rising 0.5 percentage points to 9.1 percent, the N.C. Commerce Department reported Tuesday.
The rate had hit a recent low of 8.6 percent in April. By comparison, the rate was 9.5 percent in May 2012.
For the Winston-Salem metropolitan statistical area, the rate increased 0.5 percentage points to 8.5 percent. The Forsyth County jobless rate was up 0.4 percentage points to 8.5 percent.
The May rate typically includes some seasonality in the form of college students entering the job market.
But the rate does not reflect the changes in federal and state unemployment insurance benefits that took effect this week.
Economists say it may take several months, if not into the early part of 2014, to determine whether the reduced jobless benefits and the promise of a quicker reduction of a $2.15 billion debt to the federal government will spur employers, particularly small businesses, to increase hiring.
The Winston-Salem MSA had a net gain of 600 jobs during May. But the year-over-year net gain is just 100 jobs. Economists say year-over-year data make for better comparisons.
The MSA consists of Davie, Forsyth, Stokes and Yadkin counties for the May calculations. Davidson County was placed in the MSA by the federal government in February, but commerce officials said Davidson’s employment data may not be included until later this year or early 2014.
The Winston-Salem MSA’s year-over-year job growth was the 11th lowest of the 14 metro areas measured by the department.
The region had a net gain of 800 leisure and hospitality jobs, 400 in education and health services and 200 in government. It lost 900 jobs in professional and business services and 100 in manufacturing.
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 skills, are able to work full time but can get only part-time work, or are receiving severance packages after the elimination of a job. It also includes those who have exhausted their state and federal unemployment benefits.
A rate compiled by the U.S. Bureau of Labor Statistics, the U6 index, includes those people. The latest update for North Carolina found 16.2 percent of adults without jobs as of March 31, compared with 13.8 percent nationally on May 31.
At least 70,000 North Carolinians, including about 12,000 in the Triad and Northwest North Carolina, lost their federal extended UI benefits Sunday as part of the General Assembly’s experiment for reviving the state’s economy in part through significantly cutting jobless benefits.
Another 100,000 North Carolinians who would have become eligible for the benefits from now until Dec. 31 will be affected, according to N.C. Justice Center data.
Legislators disqualified the state from federal extended benefits because they chose to alter North Carolina’s UI standards without federal government approval. As a result, North Carolina is the only state that has lost its federal extended benefits.
North Carolinians who started collecting state UI benefits as of Monday could lose up to six benefit weeks as the law changes the maximum number from 26 to 20. The maximum weekly benefit shrinks from $535 to $350.
Claimants who started receiving state UI benefits before Monday will complete their allocated number of weeks and weekly amount. But once those are exhausted, that’s it for them.
According to the N.C. Division of Employment Security, 22 percent of post-June 30 claimants will receive a reduced weekly benefit amount, including 17 percent who now qualify for the maximum $530.
Paradoxically, the state and Triad jobless rates could fall further this year as more people stop searching for work.
Michael Walden, an economics professor at N.C. State University, said he continues to project a higher rate of job growth for the state than last year.
“However, the unemployment rate may not drop each month, as labor-market improvement pulls in individuals who had previously stopped looking for work,” Walden said.
Walden said it’s likely the job growth will continue to be felt more in the state’s urban areas, particularly Charlotte and the Triangle.
“Technology is rapidly eroding jobs for middle-skill workers, giving the job market a barbell shape — growth in jobs at both the upper-skill level and the lower-skill level,” Walden said.
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