N.C. Employment Security Commission Chairwoman Lynn Holmes said today that, at the direction of Gov. Bev Perdue, she is suspending certain provisions of a bill passed this summer because they do not comply with federal law.

Senate Bill 532 made a number of changes to the state's employment security commission. Perdue vetoed the legislation, but the legislature overrode it. 

Opponents warned that flaws in the law would lead to improper denial of unemployment benefits for those out of work and increased state and federal unemployment tax rates for businesses.

The bill's supporters said the concerns are overblown, and that the Department of Labor has never sanctioned a state so that unemployment tax rates rise.

The Triangle's jobless rate rose significantly in August, news that is certain to raise concerns about whether the economy is headed back into recession.

The region's unemployment rate rose to 8.7 percent in August, according to data released Friday by the N.C. Employment Security Commission and seasonally adjusted by Wells Fargo Securities economists in Charlotte.

That's up from 8.3 percent in July.

"The economy worsened in August across the country and in North Carolina and there's really no escaping that fact," said Wells Fargo senior economist Mark Vitner.

The loss of over 14,500 workers from the state's economy in August pushed up the state's jobless rate for the fourth consecutive month, further indication that North Carolina is still mired in a post-recessionary rut.

The N.C. Employment Security Commission said this morning that that statewide jobless rate rose to 10.4 percent last month, up from 10.1 percent in July. The August jobless rate is the state's highest in more than a year.

The data show that the size of the state's labor force declined by 2,777 people as the number of jobless outnumbered those who are getting paychecks.

The state has added an anemic 25,600 jobs so far this year. Economists say North Carolina would have needed to add about 40,000 by this point to put a dent in the jobless rate.

"To me it looks like the economy stalled in July and August," said Mark Vitner, an economist with Wells Fargo in Charlotte. "A lot of people are saying it looks like a recession because their pipeline of business has dried up."

The Triangle's jobless rate held steady in March as the region gained nearly 5,000 jobs, the biggest single-month gain in more than three years.

The area's unemployment rate was 7.5 percent last month, according to data issued this morning by the N.C. Employment Security Commission and seasonally adjusted by Wells Fargo Securities in Charlotte.

That puts the Triangle's economic recovery far ahead the rest of the state, which posted a jobless rate of 9.7 percent last month.

After nearly two weeks of inaction, state legislators could soon restore jobless benefits to 37,000 job seekers who would otherwise lose their unemployment insurance Friday.

The state Senate could vote as early as today to extend the benefits, setting up a state House of Representatives vote tomorrow to get the money out to jobless residents.

But Republican leaders in the General Assembly have linked the unemployment benefits, which are a priority for Gov. Bev Perdue, to a GOP budte. That way, if Perdue wants to support the state's jobless, she'll also have to vote for the Republican budget.

In addition to overpaying millions in unemployment benefits last year, the state's Employment Security Commission also paid $147 million in benefits out of the wrong account, according to an annual audit of the agency's finances.

The $147 million was paid out of the state’s unemployment trust fund when it should have been paid from federal unemployment trust funds.

The error will actually lower the total amount the state owes the federal government, ESC spokesman Larry Parker said.

North Carolina has borrowed about $2.5 billion from the federal government in recent years to pay benefits out of its state trust fund. Payments from the federal trust funds don’t require repayment.

The ESC faced a firestorm of criticism last fall after it began recouping $28 million in overpayments it mistakenly made to about 38,000 unemployed workers.

Here's an update on the looming interest payments that North Carolina will soon owe the federal government for the billions it has borrowed to pay unemployment insurance benefits.

The Employment Security Commission reports that the state's current tab is $2,559,140,637.22.

The exact payment due in September will depend on how much additional money the state borrows between now and then.

North Carolina is paying an interest rate of 4.1 percent on the money, which means the state will owe at least $104 million in September.

North Carolina, which has borrowed billions from the federal government in recent years to pay unemployment benefits, will soon have to start paying some of that money back.

The first interest payments on the roughly $2.5 billion the state has borrowed since February 2009 is due in September.

North Carolina is one of 30 states that owes money for its unemployment programs, a situation caused by the length and severity of the downturn and the fact that many states entered the recession with too little money saved up to pay benefits.

Only a handful of states have borrowed more than North Carolina.

The state jobless rate dipped slightly to 9.6 percent in October, a sign that the vaunted turnaround has not yet arrived.

The state jobless figure, released this morning by the N.C. Employment Security Commission, is a slight reduction from September's 9.7 unemployment rate.

However, state data shows that more than 12,000 people dropped out of the workforce in October.

"That's not good," said N.C. State University economist Mike Walden. "The worry I have about this is the number of people dropping out of the workforce who are not counted as unemployed."

The U.S. Department of Labor said today it has approved the release of $205 million in stimulus funds that will be used to modernize North Carolina's unemployment insurance system.

The state's Employment Security Commission can use the funds to pay unemployment benefits, or use it to improve the system by which North Carolina delivers employment services.

The stimulus act included $7 billion for modernizing unemployment programs.