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September 22, 2006

Can employment and unemployment both increase

Recent economic data from North Carolina revealed a puzzling situation. Both the number of people employed and the number of people unemployed increased during the same month. The same situation was observed in several counties. N.C. State University economist Mike Walden explains how this occurred.

"Well, we are having in North Carolina a situation where jobs are increasing. We’ve seen a fairly good job market … over the last year or two years," Dr. Walden says. "And this is I think causing two things to happen: One it’s causing people to move here. And it’s causing people perhaps to move here who don’t yet have jobs.

"And so when they get here and they are still looking for a job, they can be counted as unemployed. And that can raise the number of people listed as unemployed," he explains. "The other thing that increased numbers of jobs can do is it can cause people who got discouraged three or four years ago when there weren’t jobs, they dropped out of labor market and now the job market is better so they are coming back. And again until they get a job, they will be listed as unemployed.

"So it’s actually very easy when you have an economy that is growing, that is adding jobs," he concludes, "it’s very easy for you to have a situation where in the same month you have the number of jobs go up as well as the number of unemployed folks go up."

Posted by deeshore at September 22, 2006 08:41 AM

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