State jobless rate rises sharply in August; local pace of inflation eases

Unemployment in Washington state took a big jump higher last month, providing further evidence that the local economy is sliding toward recession along with the rest of the country.

The statewide jobless rate hit 6 percent in August, after adjusting for seasonal variations, versus a revised 5.6 percent in July, according to the state Employment Security Department. That's the highest level in nearly four years.

Unemployment also rose sharply in the Seattle metro area, to 4.8 percent from 4.3 percent in July.

The state added just 1,300 nonfarm payroll jobs last month, the department said in its monthly report. August marked the fifth month out of the past six in which the payroll jobs figure barely budged.

Still, "even though we're growing slowly, we're at least growing," said David Wallace, the state's acting chief labor economist.

But Wallace said it's likely the jobs picture will continue to darken over the next several months, as more Washingtonians seek work than there are jobs for them to fill.

"There are a lot of signs that are indicative of a recession, but I'd hesitate at calling it that," he said.

One glimmer of good news: Inflation in the Seattle metro area eased a bit in August, though it remains relatively high and is running hotter than the nation as a whole.

The federal Bureau of Labor Statistics said today that Seattle-area prices rose 5.45 percent between August 2007 and August 2008, versus a 12-month rate of 5.83 percent in June. The local inflation rate is calculated every other month.

In the jobs report, the data showed the strongest-performing employment sector last month was local government, which added a seasonally adjusted 4,400 jobs. Software publishers added 700 jobs, and hospitals, education services and bars and restaurants added 400 jobs each.

But the transportation and warehousing sector lost 500 jobs in August; clothiers cut their payrolls by 600 jobs, and residential construction slid by 1,000 jobs

Over the past 12 months, the state's residential building sector has shrunk by 8,800 jobs, or nearly 8.8 percent; gains in nonresidential construction weren't enough to offset those losses.

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