news-record.com

North Carolina’s unemployment picture grew significantly bleaker in January as the state’s economy began to hemorrhage jobs. The Employment Security Commission said Wednesday the state’s jobless rate hit 9.7 percent, the highest level in more than 25 years, and 1.6 percentage points higher than in December. Economists say those numbers suggest the state’s economy took a severe downturn in January.

“That’s a very substantial move,” Don Jud, professor emeritus at UNCG, said of the unemployment rise. “This is further testimony that we are in a very severe recession.”

The surge placed North Carolina in bad company:

* Only five other states — Michigan, California, South Carolina, Rhode Island and Oregon — had higher jobless rates for the month.

* With its 1.6 percentage-point rise in January, North Carolina joined Oregon and South Carolina with the nation’s highest increase in its monthly rate. During the past year, the rate had not climbed more than six-tenths of a point in any month.

* The state tied South Carolina with the nation’s biggest increase in its unemployment rate over the past year, 4.7 percentage points.

Overall, the state’s unemployment totals increased by more than 73,000 workers in January, or nearly 20 percent. That brings the number who are jobless and seeking work to 443,000.

The ESC said that since the recession began in December 2007, unemployment has increased 96.1 percent in North Carolina and 54 percent nationwide. Of the state’s job losses, more than 215,000 have come since this time last year.

“The numbers are simply awful,” said John Quinterno, a research associate at the N.C. Budget & Tax Center in Raleigh. “I don’t see any good news. ... The situation will only get worse before it gets better.”

One economist predicted Wednesday that the unemployment rate would continue to soar.

“With the employment market not expected to rebound until mid-2010, we’ll be looking at some scary job numbers in the months ahead,” N.C. State economist Michael Walden told WRAL.com. “I don’t see the rate peaking until next year, probably at near 14 percent for the entire state.”

The state rate in January 2008 stood at 5 percent, less than a percentage point above the national average. That compares to a 2.1 percentage-point gap between the state and the national rate this past January.

ESC officials cited several reasons for the January rise — a surge in workers moving from severance pay to unemployment insurance, small companies that managed to wait until the first of the year before laying off staff and “the flow of the economy.”

Of the various industry segments, only financial activities and professional and business services showed job gains in January. The other six areas reported losses, paced by manufacturing and construction.

The January jobless rate is the highest since March 1983 when it hit 10 percent. State employment records only go back to 1976. The ESC will release unemployment rates for counties March 19.

Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com