Washington's job market shrinks by 1,800 jobs in April

The Washington economy remained very much of a "good news/bad news" story in April: Despite clear signs of a weakening jobs situation, the state is still running ahead of the nation as a whole.

The state lost 1,800 nonfarm payroll jobs, according to the Employment Security Department's monthly report, which is adjusted to smooth out seasonal variations. It was the second straight monthly decline, after a revised 2,300-job drop in March.

The monthly figures mark the first back-to-back job losses since February and March of 2003, during the last recession.

But Washington's unemployment rate fell to 4.7 percent from a downward revised 4.8 percent in March, comparing favorably to the national jobless rate of 5 percent.

Unemployment in the Seattle metro area was even lower, falling two-tenths of a percentage point to 3.5 percent, the lowest rate in the state.

"We're kind of experiencing a mixed picture," said Dave Wallace, the state's acting chief labor economist. "We don't have enough supporting evidence to say we're in a recession; considering we're getting a lot of mixed signals, I wouldn't say we are."

It's not uncommon for the two employment indicators to point in different directions in any given month, though over the long haul they tend to move together.

The nonfarm payroll numbers come from a survey of about 7,500 Washington employers, while the unemployment rate is derived from a separate survey of 1,100 to 1,350 Washington households (and not, as is sometimes thought, by counting how many people receive state unemployment benefits).

Year-over-year growth in nonfarm payrolls has slowed in each of the past five months; payrolls last month grew 1.6 percent compared with April 2007.

Still, that was considerably stronger than the paltry 0.34 percent national growth rate.

It was unclear, Wallace said, how much of April's improvement in the unemployment rate reflected more people working and how much was due to people dropping out of the labor force — and hence out of the calculations.

Several sectors — from construction and wood products to financial services, retail and hospitality — were stung by the nationwide housing slump and consumers pinching their pocketbooks.

Two of the brightest sectors were the arts, entertainment and recreation sector, which gained 600 payroll jobs; and aerospace, which added 500 jobs — essentially all of them in the Seattle area. State government added another 500 jobs.

But retailers cut 1,100 payroll positions, including 800 at general merchandisers, a category that includes big discounters such as Wal-Mart and Target.

Residential construction lost 800 jobs statewide last month and has cut 3,700 jobs over the past year; heavy and civil engineering dropped 300.

Those losses were offset somewhat by continued strength in nonresidential construction, a sector that added 700 jobs in April and has gained 5,500 jobs since April 2007.

Wood-products manufacturing lost 100 jobs last month and 1,200 over the past year. Wallace said that likely reflects fallout from the collapsed housing market as well as the sector's long-term decline.

Another likely casualty of the housing bust and subsequent credit crunch: the 300 jobs cut in April by banks and other lenders.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com