NC’s jobless rate in July rises for first time in year

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The state’s jobless rose for the first time in a year during July, although at a minimal increase, the N.C. Commerce Department reported today. (Image: The Winston-Salem Journal)

RALEIGH, N.C. — The state’s jobless rose for the first time in a year during July, although at a minimal increase, the N.C. Commerce Department reported today, according to the Winston-Salem Journal.

The rate inched up 0.1 percentage point to 6.5 percent. It is down from 8.1 percent in July 2013.

The increase may signal that the “Carolina Comeback” touted by Gov. Pat McCrory and Republican legislative leaders has lost some momentum. They have said for a year that the economic recovery has been fueled in part by a major change in how the state provides unemployment insurance (UI) benefits.

However, the rate barely has moved since it was 6.7 percent in January.

In other employment news, the Commerce Department said that Davidson County will be included in the Winston-Salem metropolitan statistical area with January’s monthly data report, which is released in March.

Davidson was grafted into the Winston-Salem MSA in February 2013 — along with Iredell County into the Charlotte-Gastonia-Rock Hill, S.C., MSA — but the U.S. Bureau of Labor Statistics has waited to implement the changes.

The state jobless rate is affected during the summer months by several seasonal factors.

The most prominent is the expiration of public-school teacher contracts at the end of the previous school year. Teachers are counted as unemployed until their new contract is offered and accepted. The rate also reflects high school and college students entering the job market.

As a result, it may take until the October employment data is reported to determine whether there is enough private-sector job growth to spur further decreases in the jobless rate.

The July report, as has been the case for a year, has a good-news, bad-news element to it when reviewing the seasonally adjusted data. The data do not distinguish how many of those workers are full time, temporary or part time.

In the employers’ monthly survey, there was a net gain of 11,500 private-sector jobs and 4,300 government jobs from June to July. Private sector payrolls are up 2.8 percent in the state year over year to 93,900. Government jobs are down 0.7 percent, or by 4,900 jobs over the same time period.

The biggest gain in the private sector from June to July was professional and business services at 4,800 jobs, followed by trade, transportation and utilities at 3,300 and construction at 2,100 jobs. The sectors with the largest job losses were education and health services at 1,600 and financial activities at 1,300.

Michael Walden, an economics professor at N.C. State University, said he considered the overall labor force report as “robust” considering the private sector growth both in July and year over year.

In the household monthly survey, there was a 14,550 decrease in the state labor force, which breaks down to a 19,848 decrease in North Carolinians considered as employed and a 5,298 increase in those considered as unemployed.

For the past year, there has been an 18,222 decrease in the labor force, with 77,720 not longer counted as unemployed and 59,498 having gained work.

The state jobless rate increase, if it continues over the next two months, could lead to additional benefits for future jobless beneficiaries.

Changes made to the state’s unemployment insurance (UI) benefits law in July 2013 place an importance on measuring the average jobless rates for the periods of January through March and July through September.

The General Assembly approved a sliding scale that drops the maximum and minimum UI benefit weeks by one for every 0.5 percentage point decrease in the state jobless rate to 5 percent. The number of maximum and minimum benefit weeks also rise with every 0.5 percentage point increase in the rate.

The maximum weekly benefit was reduced from $535 to $350.

The current UI benefits for new claimants as of July 6 are a maximum of 14 and a minimum of seven. That’s compared with a maximum of 26 weeks and no minimum as recently as June 2013.

If the July through September jobless rates were to average 6.6 percent to 7 percent, another week would be added to maximum and minimum UI benefits beginning Jan. 1. The 14 benefit weeks already are below the average UI claimant duration, which is 17½ weeks, according to the Commerce Department.

Walden predicts the rate will range between 6 and 6.5 percent during the second half of the year.

“I wouldn’t be surprised if we have some months where both the number of jobs and the unemployment rate rise — a result of discouraged workers coming back into the labor force and looking for work,” Walden said.

McCrory and Republican legislative leaders have said the tough love UI benefits approach has made individuals more willing to take available jobs — including at lower wages and potentially below their skill level — as their benefits run out.

However, several research groups, such as the Economic Policy Institute, say there are at least three applicants for every job opening in North Carolina.

The traditional jobless rate does not include several categories of people, including those who have stopped looking for work, job training or other educational efforts; 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 a job.

A rate compiled by the U.S. Bureau of Labor Statistics, the U6 index, includes those categories. As of June 30 —the latest available — the U6 index rate for North Carolina was 13 percent, compared with 12.2 percent nationally as of July 31.