EconWar



The Charlotte Observer


January 20, 1996

NC jobless rate up sharply

Taylor Batten, Staff Writer * The Associated Press contributed to this report.

Copyright © 1996, The Charlotte Observer



North Carolina's unemployment rate jumped sharply in December, reflecting what a state labor market expert terms as an increasingly soft economy.

The rate rose from 4.2 percent to 5.1 percent in December, the largest gain among the nation's 11 major industrial states. The national rate held steady at 5.6 percent.

The 21 percent increase could just be typical of a volatile monthly index, analysts said. But it coincides with increasingly soft state and national economies, and fears of a recession are looming.

The state's rate was 3.3 percent a year ago and 3.9 percent only two months ago.

``You do see a sustained rise and that's the more significant figure,'' said Greg Sampson, staff economist at the state Employment Security Commission.

Economists consider a 4.5 percent unemployment rate full employment in North Carolina, Sampson said.

``We're not far off that and if it stays there it'd be fine, but the concern is it could drift up over the next couple of months, which is certainly possible,'' Sampson said.

The increase came in a month when unemployment usually drops because retailers hire many seasonal workers. But the 1995 holidays saw lackluster sales and retailers hired sparingly.

``The retail Christmas season was real weak, and this coming year looks to be a weak year as well,'' he said. ``People bought a lot in good times. But there are only so many people to go buy houses and cars. This ought to be a real sluggish year.''

Nationally, the manufacturing industry enjoyed its biggest monthly increase in nearly six years, helped by the return of striking aircraft workers.

The Labor Department said the overall jobless rate ended the year about where it began, as the nation's businesses added 1.7 million workers to their payrolls in 1995. In the previous year 3.53 million jobs were created.

Economists said the slowdown in job growth was to be expected, given the fact that the economy grew much less robustly in 1995 than it had in 1994.

The Clinton administration expressed satisfaction that the December unemployment report, the first major statistical release in a month, showed the jobless rate holding steady with payroll growth of 151,000.

The jobless rate dipped as low as 5.4 percent in February, the best showing for the current recovery, and climbed as high as 5.8 percent in April. It spent the year in a narrow band that many analysts believe is close to full employment as the current recovery completes five years of growth.


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Copyright © 1996, The Charlotte Observer.


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