Retail pain adds to state jobless rate

Washington's retail sector is taking a heavy blow as the state feels the impact of the national economic malaise.

The unemployment rate rose to 6.3 percent in October, up from 5.7 percent in September, the state Employment Security Department said Tuesday. Nationally, the jobless rate stood at 6.5 percent. The Seattle metro area's rate rose from a revised 4.5 percent in September to 5.4 percent in October.

Retail workers are paying for October's unraveling of the financial system and rapid tightening of credit markets, which constrained consumers' ability to spend. A strike by Machinists at Boeing and job losses in other industries further sapped consumer confidence.

The "retail sector this last month really started to show the effects of a weakening credit market," said Mary Ayala, chief economist for the Employment Security Department.

Some 1,700 retail jobs were lost last month statewide, according to a household survey conducted by the department — and the outlook is not good, said Ayala.

The slowdown "will go on for a while until people have more confidence or they have more jobs," she said.

Financing for big-ticket items like cars and houses has become more difficult to obtain, contributing to plummeting sales and lost jobs.

About 30 major-brand car dealerships in Washington have closed or combined since January, including a dozen just since September, said Brian Imai, senior general counsel for the Washington State Auto Dealers Association, which represents some 328 dealers.

Last month, Bret Chevrolet, a General Motors dealership in Kent, closed its doors, putting some 40 workers out of a job, according to a former employee. The owner declined to comment, but the dealer association confirmed the closure.

Car sales are down 15 percent in Renton, where they account for a quarter of the city's sales-tax collections, said Alex Pietsch, administrator of the city's Department of Community and Economic Development.

The crisis has also prompted retailers to delay until next year the opening of several stores at The Landing, a new Renton shopping center, Pietsch said.

"Clearly, things are off," he said. The impact on the city's revenues has been offset, however, by highway-construction work and the major stores that have already opened at The Landing.

The data provided by the state on Tuesday was somewhat confusing. The unemployment figure, which originates with the federal Bureau of Labor Statistics, was gloomy. (That data does not include the striking Boeing workers, however; the bureau doesn't count workers on strike as unemployed.)

But a separate Employment Security Department survey of household employment painted a brighter picture.

Boeing strike

Although the state survey reported the state lost 23,200 nonagricultural jobs in October, that figure reflected the two-month Machinists strike at Boeing that accounted for 24,000 jobs.

Without the strike, which ended Nov. 2, payrolls statewide would actually have grown by about 800 jobs last month.

"The employment losses look dramatic, but we recouped all of them, and then some, when the Boeing strikers returned to work in November," Ayala said.

However, she added, it's clear "weaker employment conditions" prevail.

The department's own database of WARN notices — notifications of major pending job cuts — indicates that October took a heavy toll on workers in all sectors.

From yachts to windows

Meridian Yachts of Arlington laid off 721 workers amid a cooling market for luxury vessels. Milgard Windows of Marysville cut 80 jobs. Construction-equipment manufacturer Genie Industries cut 475 positions in Redmond and Moses Lake.

There's more to come, as many local firms have announced layoffs that will take place in the next few months.

Paccar is about to cut 430 jobs at its Kenworth truck-manufacturing plant in Renton — more than 80 percent of the total, according to union officials.

The Seattle Times Co. said it would eliminate up to 145 jobs. Washington Mutual, the poster child for the mortgage-lending crisis that sparked the current turndown, is gearing up to cut thousands of local jobs.

Retail and education services lost the most jobs in October, down 1,700 jobs each, according to the Employment Security survey.

Construction lost 1,100 jobs for the month; manufacturing lost 1,300 jobs, not taking into account the Boeing strike. Public-sector jobs increased by 6,000.

The state is performing better than the rest of the country, Ayala said, but is experiencing the same downward trend. Washington's unemployment stood at 4.6 percent of the work force in October last year.

"It shows that the economy is slowing down," Ayala said.

During the 2001-2003 recession, state unemployment reached a high of 7.6 percent. The highest figure on record occurred in 1982, when it reached 12.2 percent.

At the Sound Ford car dealership in Renton, the slowdown has been gradual, mirroring that of the national economy and of the Detroit-based manufacturer of the cars it sells.

Two years ago the dealership employed 200 people and occupied a large site on Rainier Avenue South. But earlier this year, after Ford's downsizing strategy, owner Rich Snyder moved the dealership to a smaller location across the street, with 100 workers.

The credit crunch and the Boeing strike hit new-car sales hard, said Snyder.

Sound Ford's salesmen have sold more used cars and scrambled to secure financing for customers, and November has turned out to be surprisingly good. As of Tuesday, the dealership had sold 131 vehicles and could be on its way to 230, an unusually good month.

"A lot of people still have good jobs," Snyder said.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com