The latest federal employment data for North Carolina show positive signs of economic recovery, despite an increase in the state’s official unemployment rate for May. That’s the assessment from John Locke Foundation President John Hood.

North Carolina’s official unemployment rate for May was 6.4 percent, according to the U.S. Bureau of Labor Statistics. That rate is up 0.2 percentage points from April but down 1.9 percentage points from an 8.3 percent unemployment rate in May 2013.

“May brought another set of relatively good payroll and employment reports for North Carolina,” Hood said. “The unemployment rate edged up a bit as some workers re-entered the labor market looking for work, but both payroll jobs and household employment posted solid gains.”

It’s important to place the latest set of numbers in context, Hood said. “Given monthly fluctuations and sample sizes, it’s wise to use a long-term perspective to evaluate the performance of the state’s labor market compared to the national average, particularly if the goal is to shed light on the effects of public policies.”

“For example, the North Carolina General Assembly enacted several policies in mid-2013 intended to improve the state’s economic performance, including an end to extended unemployment-insurance benefits, a sweeping regulatory-reform measure, and a major reform and reduction of state taxes,” Hood explained. “From June 2013 to May 2014, North Carolina outperformed the national average in job creation, gains in household employment, and declines in household unemployment.”

The BLS establishment survey of payrolls shows North Carolina has added about 78,000 jobs since July 1, 2013. “If the state had merely matched the national average, we would have created 13,000 fewer jobs during the period,” Hood said.

According to a separate survey of households, 85,000 more North Carolinians were working in May 2014 than in June 2013, while 87,000 fewer North Carolinians were unemployed. “If the state had merely matched the national average since mid-2013, there would have been 33,000 fewer employed North Carolinians and 23,000 more jobless North Carolinians looking for work in May,” Hood said.

Hood rejects the argument that recent improvements in North Carolina’s employment data are tied to discouraged workers dropping out of the work force. “Declines in labor-force participation do not explain the differences between North Carolina’s performance and the national average,” he said. “North Carolina’s total civilian labor force was only 0.04 percent lower in May 2014 than in June 2013. The national civilian labor force actually declined by a larger amount during the same period, 0.1 percent.”

Policymakers should focus on the long-term impact of recent public policy changes, Hood said. “While it’s unwise to read too much into the employment report for any single month, this latest data set fits well with arguments favoring the pro-jobs, pro-economic growth policies the General Assembly enacted a year ago.”