Que pasa? What's up is that Hispanic immigration to North Carolina is going down. Some are returning home or moving elsewhere.

• Author: Martin, Edward
• Position: COVER STORY - Concert review

Morning passes quietly at the corner of Church and Oak in Biscoe. A block away on the main drag, a logging truck groans, downshifting for one of the town's two stoplights. Then the stillness returns. In a small brick building, the smell of cilantro, onion and chilies fills the dining room--24 chairs, four green-backed booths, two yellow-and-red parrot figurines, one with sunglasses on its beak, and no customers. "iDespierta America!" chimes an announcer on the Spanish-language channel between celebrity interviews and a performance by a soulful singer backed by a mariachi band. It's "Wake Up America!" on Univision.

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Fortunato Romero ignores the TV playing in the tienda y restaurante--store and restaurant--he opened in the early 1990s just ahead of a wave that was about to engulf even places such as this eastern Montgomery County town of 1,754, whose main claim to fame is that it's three miles south of Star, by one measure the geographic center of the state. By 2008, North Carolina's Hispanic population--legal and illegal--had grown from barely noticeable to 700,000 or more. That's nearly one person in 10.

Their social, political and, most of all, economic impact has been astonishing. In the last 10 years, Latinos have filled one of three new jobs statewide. "We'd be in a pickle without them," says Dave Simpson, Raleigh lobbyist for Carolinas AGC, the construction trade association. They hold half or more of the jobs in specialties such as framing and masonry. In 2006, the Kenan Institute of Private Enterprise at UNC Chapel Hill forecast that the economic impact of Hispanics in the state would reach $18 billion this year. Now, though, something nobody expected is happening.

"!Despierta America!" But there are few in Romero's restaurant and store this morning to wake up. The sole customer has been a lone Anglo who wanders in, orders enchiladas verdes and, after eating, departs without leaving a tip. Romero, 50, slides into a corner booth. He talks, laughing often and easily, the accent of his native Mexico City still strong after 30 years in the U.S. The hands of the clock clasp as noon draws near. "Nine months ago, we never take a lunch break until 3 o'clock because we have lots of people here this time of day. Now, you see, we don't have any customers. We are down 40%--50%--or more. Where are they?" He shrugs.

No one is certain why or to what extent, but Hispanics are abandoning North Carolina or at least arriving at a markedly slower rate. Much of the evidence is anecdotal, but one thing is clear: After two decades in which the state had the nation's fastest Hispanic growth--400% in the 1990s alone, now 12th in Latino population--it is losing its luster as one of the most accommodating places for them.

The reason? Recession and a statewide unemployment rate that reached 10.7% in February are obvious suspects. Plant closings and construction slowdowns have staggered industries that employ tens of thousands of Hispanics. Plummeting home building has reduced the need for carpenters and landscapers. Stricter enforcement of immigration laws is another factor. "If you're unemployed and on top of that they're hunting you down, why bother?" asks Tony Asion, president of the Raleigh-based Hispanic advocacy group El Pueblo. More than 4,000 were deported in 2008, and political opposition to Latinos who have entered the country illegally is hardening.

"We do know the rate of immigration has slowed," says Mark Hugo Lopez, associate director of the Washington, D.C.-based Pew Hispanic Center, a nonprofit that studies the impact of the U.S. Latino population. Nationwide, he says, the figure has dropped from about 800,000 a year in the early 2000s to fewer than 500,000 last...