NC Cuts Unemployment Benefits – Sees Job Market Improve

A year ago, North Carolina became the first state in the nation to exit the federal government’s extended-benefits program for the unemployed. Facing the prospect of hikes in payroll taxes to pay back Washington, the governor and state legislature instead reduced the amount and duration of unemployment-insurance benefits, which had been higher in North Carolina than in most states. As a result the state lost its eligibility to participate in the extended-benefits program on July 1, 2013.

According to the U.S. Bureau of Labor Statistics, the number of payroll jobs in North Carolina rose by 1.5% in the second half of 2013, compared with a 0.8% rise for the nation as a whole. Total unemployment in the state dropped by 17%, compared with the national average drop of 12%. The state’s official unemployment rate fell to 6.9% in December 2013 from 8.3% in June, while the nationwide rate fell by eight-tenths of a point to 6.7%.

In addition to the standard unemployment rate released every month (U-3), BLS computes annual averages for unemployment rates that include discouraged workers (U-4), all other marginally attached workers who have stopped looking for jobs (U-5), and people working part time who would rather have full-time jobs (U-6). By each measure, North Carolina still experienced one of the nation’s largest drops in unemployment.

As of May, the most recent month of BLS data available, North Carolina’s labor force is down only 0.04% from June 2013. During the same 11-month period, the nation’s labor force dropped 0.1%. S