North Carolina unemployment rates fall dramatically in June as thousands return to work

North Carolina news

RALEIGH, N.C . (AP & WNCN) — North Carolina’s jobless rate fell dramatically in June as restaurants, hotels and retailers bounced back since Gov. Roy Cooper’s COVID-19 restrictions were eased.

The state announced on Friday that the state’s seasonally adjusted unemployment fell from 12.8% in May to 7.6% in June.

The number of people on the job grew by 227,500. Cooper ended his stay-at-home order in late May, allowing restaurants to serve indoors again, albeit at partial capacity.

Bars, gyms, movie theater and entertainment venues still have to stay closed. The nation’s unemployment rate was just over 11 percent last month.

“Some people who don’t have jobs dropped out of the labor force. I wouldn’t put a lot of concern on that because the federal government is having trouble classifying people who are not working but are getting paid through the Payroll Protection Program,” said Mike Walden, an economist at NC State. “So, other than that footnote, I would say this is a very good report for North Carolina and somewhat surprising in its strength.”

Walden said rising COVID-19 cases and hospitalizations are likely to slow the pace of recovery. He said data in recent weeks shows a slight decline in mobility in North Carolina as some people grow more concerned about the spread of the coronavirus.

“I think we will see a reaction by people in terms of reduced economic spending and reduced going out, etc. This could slow things down. I don’t think it’s going to turn around our recovery, but it could slow it in the coming months,” said Walden.

The report comes as Congress debates what to include in the next stimulus bill.

People who are unemployed are currently receiving an additional $600 per week in benefits on top of what they receive from the state. In North Carolina, the maximum is $350 per week.

That additional benefit from the federal government ends this month. There’s no agreement yet on an extension.

“That’s been a big deal, not just for helping people who are unemployed but for injecting money into the economy and continuing spending. I do think Congress will do something because I think they realize that, that this has been a great help to the economy,” said Walden.

Jenni Propst, who works backstage at live events, has been out of work since March with no indication when she’ll be able to go back to her job. Gov. Roy Cooper (D) this week extended phase two of the state’s reopening process by another three weeks, meaning a variety of businesses will remain closed.

She’s concerned about how she and her colleagues will be impacted when the federal unemployment benefit ends in a matter of days.

“When that happens, there is absolutely no way that myself or any of my co-workers will be able to pay our bills,” Propst said. “The majority of us, we just want to be back at work. I would much rather be earning my paycheck than waiting for my unemployment insurance.”

Republicans in Congress and the Trump administration have raised concerns about the federal benefits leading to people making more on unemployment than they did in their jobs. A recent Congressional Budget Office report estimated if the $600-per-week payments were extended, about five out of six recipients stand to make more money from that than working.

“We’re not going to take away unemployment benefits. I think what we’ll do is a more prudent cap on perhaps 70 to 75 percent of the wage so we create incentives to work, not disincentives,” Larry Kudlow, director of the National Economic Council, told reporters Thursday.

CBS 17 reached out to the offices of Republican senators Thom Tillis, who is up for re-election this year, and Richard Burr. Neither responded to requests for comment.

State Sen. Wiley Nickel (D-Wake) wrote to the Republican chairs of the state’s Joint Legislative Oversight Committee on Unemployment Insurance calling on them to meet and support legislation to increase the maximum weekly benefit in North Carolina from $350 to $450.

“We are the worst unemployment insurance system in the country in terms of the amount of money we give out to people,” Nickel said. “And, we have the money to do it. With close to $3 billion sitting in our unemployment insurance trust fund, we can afford to raise benefits.”

CBS 17 reached out to Rep. Julia Howard (R-Davie/Rowan) and Sen. Andy Wells (R-Alexander/Catawba). Neither responded to requests for comment.

“We don’t know how solvent the fund will be. We now have a record number of people on unemployment,” Republican House Speaker Tim Moore previously told CBS 17.

“Partially opening the economy is showing partial results.  Fully opening the economy should likewise show even better.  We can protect lives and livelihoods with the same intensity, and should be doing just that,” Lt. Gov. Dan Forest said in a statement on Friday’s unemployment numbers.

Forest is running against Gov. Cooper this year. Cooper’s office did not respond to a request for comment.

The Associated Press contributed to this report.

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