RALEIGH, N.C. (AP) -- North Carolina's unemployment rate increased slightly in July to 8.9 percent, the state Commerce Department announced Monday, as a drop in the overall government workforce tempered private-sector employment gains.
The new rate, which rose from 8.8 percent in June, is the first month-to-month increase since January, when the rate was 9.5 percent. The monthly rate had fallen four months in a row through May.
North Carolina's rate, which had been fifth-highest in the nation in June, is now tied with Rhode Island for third-highest. Only Illinois, at 9.2 percent, and Nevada, 9.5 percent, have higher rates.
The higher rate comes as the national rate fell to 7.4 percent in July. The wider gap exemplifies North Carolina's continued struggle to rebound economically, an economics professor said.
"We seem to be going sideways, and that is an issue for a state that is trying to get itself out of the major depths of a recession," Zagros Madjd-Sadjadi of Winston-Salem State University said in an interview.
North Carolina employers dropped nearly 14,000 jobs over the month to nearly 4.3 million employed workers overall, the commerce agency said. The largest decline was in the government sector, at a loss of 5,300 positions. The sector's decline is common in the summer, department spokesman Larry Parker said, as many public school teachers are in transition. Many don't have contracts, and local school boards are making hiring decisions for the coming year.
While the rates are seasonally adjusted to count for annual trends, the government decline likely partially contributed to the unemployment rate increase because the state budget wasn't approved until late July, Madjd-Sadjadi said. That caused greater uncertainly in local governments about hiring levels this fall, he said.
Trade, transportation and utility fields saw the largest employment sector gain at 5,200 positions, followed by leisure and hospitality services at 2,700, state officials said. Increases in finance-related positions (2,400) and manufacturing (1,200) were positive signs for the economy, according to Madjd-Sadjadi.
The General Assembly passed legislation this year that Republican lawmakers say will encourage job creation and economic growth, including a tax overhaul bill that reduces individual and corporate income tax rates and an omnibus regulatory measure. The regulatory measure still sits on Gov. Pat McCrory's desk awaiting action.
Madjd-Sadjadi said businesses are making future hiring decisions based on these changes, and it will be at least six months before the provisions would have an effect on the jobless rate, if at all, he said. "If we don't see a closing of the gap" between the state and national rates, he said, then the policies "may not be working."
McCrory said during last fall's campaign that he wants North Carolina's unemployment rate to fall below South Carolina's in his first year in office. South Carolina's rate was 8.1 percent in July.
Nearly 15,000 more people are employed overall in North Carolina compared with the past year, the Commerce Department said. Almost 418,000 people are listed as unemployed in the state, a decline of nearly 37,000 in the past year but an increase of 1,500 since June.