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April 12, 2010

Was it a good jobs report?

North Carolina's unemployment rate hit a modern-record high of 11.1 percent in January. Does this mean the state's job situation continues to deteriorate?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Actually not. ... This can get confusing so let me see if I can clear it up. We actually saw in January we saw more jobs created in North Carolina than compared to December, and I should say that this is after doing your seasonal adjustments, which are very important in January.

"One job report showed jobs in the state went up by 7,000; the other job report showed jobs in the state went up by 8,000. So that's good.

"Now how can it be, therefore, that we had an increase in the unemployment rate? Well, this is due to a shifting of a group of workers that are unemployed: we call them discouraged workers. These folks are only going to be counted as unemployed if they are actively looking for work. And what happened in December, those folks weren't actively looking for work. They were unemployed, but they weren't going on interviews, so they weren't counted as unemployed. However in January they did start looking for work.

"Why? Well because the job market improved. And actually we see this at the end of recessions. We typically see jobs go up at the same time as unemployment rates go up because of the movement of these so-called discouraged workers.

"So I would recommend to folks in terms of getting a fix on what is happening in the job market, keep your eye on the number of people employed. If that number goes up, that shows that North Carolina's job market is improving."

Posted by deeshore at April 12, 2010 09:00 AM