news-record.com

RALEIGH (AP) — North Carolina job-seekers got more bad news in June as the state's unemployment rate spent a fifth consecutive month hovering above the previous historic high of 26 years ago, the state's Employment Security Commission reported Friday.

The state's unemployment rate dropped a tick to 11 percent in June compared to 11.1 percent in May. The nation's unemployment rate climbed to a 26-year high of 9.5 percent in June.

"The good news is it didn't get worse. But I think a much-awaited recovery, there's no evidence of that in these numbers," said John Coleman, an economist at Duke University's Fuqua School of Business. "North Carolina in particular has been stuck in double-digit figures since the start of the year basically. These latest figures show it's not budging from that."

N.C. State economist Michael Walden is forecasting that North Carolina's unemployment rate will peak at about 13 percent early next year and stay above 10 percent through the end of 2010. The Federal Reserve said Wednesday it expects that U.S. unemployment will top 10 percent and remain high for years.

North Carolina's unemployed still topped 500,000 in June, but the rolls showed 4,700 few people counted among the jobless either because they ran out of time to collect compensation, found work or moved out of the state.

Manufacturing continued to be the sector to be the worst hit by the recession, shedding 5,500 North Carolina jobs in June. North Carolina has lost 89,500 manufacturing jobs since the recession began in December 2007, about 17 percent of all factory jobs.

Financial services cut 2,900 jobs in June as North Carolina's banking industry continued to suffer. Governments had the greatest growth, hiring an additional 13,900 in June.

The jobs lost in manufacturing and banking may never come back, Coleman said, because of long-term structural changes that include increasing globalization.

Any general recovery in employment is likely to take a long time, and while financial and stock markets rebound and businesses show profits, hiring will likely lag as it did during previous recessions in the early 1990s and 2000. Many companies have cut work hours, so any decision to ramp up again will mean giving those people more work before the firm thinks about adding new staff, Coleman said.

Businesses also can be expected to hold back on spending and expansion because they see taxes rising in a country trying to repay federal borrowing during George W. Bush's administration, for the federal stimulus Barack Obama's administration pushed this year, and to restructure the U.S. health care system, Coleman said.

The scant job prospects are driving Matthew Lambert, 33, to enlist in the Navy before he hits the age limit to start a military career. The Clayton resident said he had his seventh job interview a week ago since losing his job as a testing equipment validation specialist in February. He said he seemed perfectly suited for the job, but believes his five years of experience led the company to choose a newer person it could pay less. He was willing to move to Hickory for another job, but the company had cut the salary it was willing to pay by $10,000 since advertising to fill the same job six months ago. Companies are able to pay less because so many people are looking for jobs, Lambert said.

"I think that's why they made up some excuse" not to hire him, Lambert said.

He expected to hear Friday from a Navy recruiter when he could take the physical and intellectual tests that are the next step in the enlistment process. Recruiters have told him that despite his bachelor's degree in forensic science, the Navy was unlikely to offer him a place in Officer Candidate School because it already had plenty of good people to choose from, Lambert said.

Still, his wife, a social worker, is "all gung-ho" about Lambert starting over as a sailor.

"It's really not about the money for me. It's about using the GI Bill when I get out so I can go back to school in another field or go to graduate school," he said.