North Carolina’s unemployment rate dropped to 6.7 percent in January, but the decline is largely because the labor force continues to shrink not because of significant gains in employment, according to the NC Budget & Tax Center.  Over the last year, the state labor force contracted by 105,600 workers, more than 1.3 percent, to the lowest levels in three years.

“Only 4 out of every 10 unemployed workers found jobs in the last year,” said Allan Freyer, BTC Public Policy Analyst. “If North Carolina is going to see a healthy long-term recovery in employment growth, we need to see all jobless workers moving into jobs, rather than out of the labor force.”

Freyer believes that most of the job growth we’re seeing in North Carolina is due to improvements in the national economy, rather than something special happening in the Tarheel State:

“In recent months, we’ve heard claims that policies enacted in the first half of 2013 generated extra special job growth in the second half of 2013. But the reality is far different,” Freyer said. “Across every meaningful measure of labor market progress, the second half of 2013 failed to perform better than the second half of 2012.”

Freyer appeared on NC Policy Watch’s News & Views over the weekend to discuss the state’s struggling economy. For an excerpt of that radio interview, click below. You can listen to the full segment here.

The Budget & Tax Center’s takeaway message on the latest jobs report: North Carolina needs to create jobs at a much faster rate than the national average and its own recent historical performance.  Along with creating more jobs overall, the state needs to create better jobs that pay enough to allow workers and their families to make ends meet.