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Hidden info in NC's record 11.1 percent unemployment rate

http://66.225.205.104/JR20100310a.mp3

Unemployment in North Carolina climbed to a record 11.1 percent in January, after hovering for several months at 10.9 percent. WFAE's Julie Rose explains the reason for the uptick just when people were starting to think the worst was behind us: The thing to remember is that the unemployment rate is a ratio, and as economist Rick Kaglic points out, "Because it's a ratio, it can mask important underlying detail. And in this case, details matter." Kaglic is with the Federal Reserve Bank in Charlotte. Think of the unemployment rate like a big game of musical chairs. People are jostling for a seat. The chairs are jobs. Anyone left standing when the music stops is considered unemployed. Now imagine a bunch of new people want to join the game. You add some more chairs, too, but not nearly enough. Kaglic says that's what happened in North Carolina last month. "North Carolina actually saw an increase in the number of jobs in January," says Kaglic. "But it saw an even bigger increase in the labor force participation - so that's folks who are entering or re-entering the labor force." North Carolina gained 8,000 jobs in January, but the Employment Security Commission estimates about 15,000 new people started looking for work. Where did they all come from? Kaglic says a lot of them are people who just quit looking for a job during the last year because they got so frustrated. Maybe they went back to school, or settled on a part-time job or decided to stay home with the kids. Once they did, they were no longer counted in the unemployment rate. But then, Kaglic says, a lot of them probably started hearing that more companies were hiring, "and as people hear that jobs are being created, more people will tend to go out and look for those jobs." Kaglic says so many people fit that description, the unemployment rate is likely to stay high for quite some time.