N.C.'s unemployment rate hits new recorded high

The Carolinas were hit with historic unemployment news today, as North Carolina's unemployment rate hit a new recorded high, and South Carolina's came in even higher.

The news comes a day after a poor U.S. job loss report that has economists pessimistic about the short term outlook for the economy. Other indicators, however, show a possible leveling out of job cuts.

Locally, North Carolina's unemployment rate rose to 10.7 percent in February, an increase from 9.7 in January, the N.C. Employment Security Commission said today. The state's highest previous jobless rate was 10.2 percent in February 1983. N.C.'s records go back only to 1976.

South Carolina's rate rose to 11 percent from 10.3 percent last month. The state had 241,000 people unemployed in February, the S.C. Employment Security Commission said.

The news comes amid a mix of encouraging and somber reports this week. Just this morning, the government said consumers increased spending for a second straight month in February even though their incomes slipped due to continuing layoffs.

Those job losses were reported yesterday - an increase for the 10th straight week nationally, with the total number of people claiming benefits jumping to 5.56 million, the highest total on records dating back to 1967.

The unemployment numbers have prompted analysts and economists to shrug off the more positive reports, including housing sales and manufacturing news, and declare a hard road ahead. We asked one economist, UNC Charlotte's Carol Swartz, how she sorts through conflicting indicators.

Says Swartz: "The current economic crisis has focused attention on job cuts and unemployment. During a recession, the unemployment rate goes up for two reasons. One is people who lost their jobs are now looking for work. The other reason is that additional people -- homemakers, teenagers, retirees -- begin looking for work, adding to the number of unemployed people.

A key indicator for her: average hours worked per week.

"When the economic recovery starts, businesses see their orders and sales increase," she says. "At first, no one knows whether this is a recovery so businesses increase average hours worked per week, using overtime if necessary. Only when businesses are confident that the higher volume of orders will last, they hire new workers and the unemployment rate begins to go down."

Is that happening yet? Nationwide, there are signs of some leveling out. The Bureau of Labor Statistics shows that the seasonally adjusted weekly average hours worked decreased by 0.1 hours in each month from August through December 2008. Provisional data for January and February 2009 showed no change in the average work week.

It's not the increase in average hours worked per week that Swartz says will signal the beginnings of a recovery. The leveling out of the hours worked could signal an impending increase, however, another sign that the economy is ready to recover.