S.C. unemployment rate falls

South Carolina's unemployment rate fell for the fifth straight month, but some labor market analysts call that a misleading decline.

The statewide rate eased to 10.7 percent in June, a slight decrease from May's revised rate of 11.1 percent and a fair distance from record-setting levels hit earlier this year. But economists point out that the improvement came not because of job growth but because the statewide labor force -- the number of employed people and those looking for a job -- declined again by roughly 9,600 people.

The declining workforce means that some skilled workers are giving up on finding work, perhaps discouraged by South Carolina's weak hiring market where one recent study said the average job search stretches to 19.4 weeks.

Labor market experts warn that the "discouraged worker" trend could have troublesome economic implications.

"Take a look at Detroit," said Scott Moore, a Hollywood-based labor market analyst. "If you don't have a workforce, you're not getting benefit of taxes and people spending on local economy, attracting new business ... so a shrinking workforce is a very difficult thing to manage."

Acknowledging the tough job market, U.S. Senate leaders agreed Tuesday to extend a series of unemployment benefits that had lapsed and cut off an estimated 40,000 South Carolina residents who were drawing unemployment checks before the program expired.

South Carolina's economy lost 3,000 jobs during June, roughly 900 more jobs than what's typical for this time of year. Government jobs were hit hardest, losing 5,000 jobs after the U.S. Census's labor intensive door-knocking efforts subsided while local and state schools released workers for the summer, according to figures from the U.S. Department of Labor.

Statewide tourism employment numbers grew by 2,400 positions, and the trade, transportation and utilities sector added 2,800 jobs.

College of Charleston economist Frank Hefner pointed out optimistically that South Carolina has added about 14,000 jobs during the last year. But that figure isn't enough to recover the roughly 100,000 jobs that seeped out of the state's economy throughout the economic recession.

"We've fallen down a deep well, but at least we've stopped falling," he said. "This 14,000-job increase is a step in the right direction."

The Charleston area's unemployment rate worsened to 9.4 percent, up from 8.7 percent in May, according to seasonally unadjusted numbers.

Figures from the S.C. Department of Employment and Workforce show the region's retail sector added 700 jobs and tourism grew by 1,100 positions, helping to offset hefty government losses of 1,300 jobs.