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Local Tech Wire

RALEIGH, N.C. – North Carolina’s unemployment rate jumped to a record high of 11.2 percent in December, with employment dropping by more than 31,000, the reported Friday.

The rate surpassed the previous high of 11.1 percent, which was set last May, and ended a string of five consecutive months where unemployment had either improved slightly or stabilized.

As bad as the news is, the actual unemployment rate is probably higher, according to N.C. State University economist Dr. Michael Walden.

“The rise in the unemployment rate was expected, and I think the rate could go higher before it declines,” Walden told
“However, what was unfortunate in the December report was that the rise in unemployment was totally due to a loss in jobs rather than ‘discouraged workers’ coming back into the labor force and looking for work,” he warned. “The labor force number actually fell in December.

“If discouraged workers and underemployed workers (those working part-time only because they can’t find full-time work), are included, then the state unemployment rate is closer to 20 percent.”

The state unemployment rate in November was 10.8 percent, and it was 8.1 percent in December 2008.

Since the recession began in 2007, 248,000 jobs have been lost statewide.

“Certainly, it’s frustrating out there right now,” ESC spokesman Larry Parker said. “We thought we would have more of the same that we had seen since February of last year. We hadn’t had too many large gains or losses. Things had leveled off, and in a couple of months, we actually had gains in employment, but small.

“[In December], obviously, there were some bigger changes,” Parker said, “and that had an effect on the rate.”

The number of people losing jobs is based on household surveys. A separate survey of employers found that non-farm jobs decreased by 2,400. Both numbers are included in compiling of the overall employment rate, according to the ESC.

The highest unemployment rate is based on records dating back to 1976, when the current methodology was implemented.

“Across-the-board losses” drove the December rate higher, Parker said.

Employment in professional and business services actually increased by 1,900, but those gains were more than offset by a loss of 2,600 leisure and hospitality jobs.

Construction jobs dropped by 1,200, while manufacturing employment fell by 900. The trade, transportation and utilities sector total fell by 800.

The size of the state’s work force, which is based on the number of people working or who are seeking work, also fell by 12,000 from November, to 4.52 million. That total also is some 55,000 less than December 2008.

“The December job report numbers were disappointing,” Walden said. “Both the household and employer surveys showed job losses, although the drop was much smaller in the employer survey compared to the household survey. Most economists put more emphasis on the employer survey because it is based on a larger sample size.”

Walden remains convinced that the job picture will improve, however.

“I still predict job gains – although modest – will begin to occur in the first half of 2010,” he said. “Still, the December employment report suggests the job market continues to be weak and will be a major issue in 2010 as well as 2011.”

The national unemployment rate is 10 percent.