State jobless rate climbs in May to 9.4%, highest in more than 25 years

Washington's unemployment rate ratcheted up again in May to 9.4 percent, the highest level in more than 25 years, according to the state Employment Security Department's monthly jobs report.

And employers in the state cut another 6,700 jobs last month, making May the eighth month out of the past nine in which payrolls have shrunk.

About the closest thing to good news in the latest report was this: Payrolls are shrinking somewhat more slowly than they did earlier this year.

Mary Ayala, the state's chief labor economist, compared the moderating pace of job losses to a driver taking her foot off the gas pedal: "You're still going forward, but you're decelerating, and eventually you'll reach zero."

But Greg Weeks, head of the department's labor-market information office, cautioned that the jobs numbers are volatile and may not yet be showing a real trend.

Extending Ayala's metaphor, Weeks quipped: "We don't know if we're going uphill or downhill."

May's 9.4 percent jobless rate, which came after a slight downward revision to April's jobless rate, was the highest since February 1984, when the rate hit 9.6 percent. It matched the U.S. rate for May, reported earlier this month.

In the Seattle metro area, unemployment leaped to 8.4 percent, from a revised 7.8 percent in April. A year ago, the local rate was 4.4 percent, compared with 5.5 percent statewide.

Still, if there's no balm like the misfortune of another, Washingtonians can look south of the Columbia River. On Monday, Oregon reported a record-setting 12.4 percent unemployment rate; that likely will be among the nation's two or three worst jobless rates when national rankings are released Friday.

The unemployment rates are adjusted to account for seasonal variations, and are derived from a survey of 1,100 to 1,350 households — not, as is sometimes thought, from counting how many people receive jobless benefits.

More than 215,000 Washingtonians received at least one unemployment-insurance payment in May, compared with 271,000 in April.

First-time jobless claims, which are averaging around 12,800 a week, are well into their regular summertime decline, but are still running two-thirds higher than at this time last year.

Economists often consider the nonfarm payroll numbers, which are based on a survey of employers, to be a more reliable gauge of the jobs situation than the unemployment rate. And based on the payroll numbers, the current recession is nearly as bad as the 1981-82 downturn.

Back then, Weeks said, payrolls shrank 4.1 percent from the peak of the previous expansion to the trough of the recession. Between February 2008, when state payrolls peaked at nearly 3 million, and last month, 120,600 jobs have disappeared — a 4.05 percent decline. (By comparison, payrolls fell 3.2 percent during the 2001-02 slump.)

Construction hit hard

The construction sector again took one of the biggest hits, shrinking by 3,100 jobs in May. Over the past year, 35,400 construction jobs have evaporated, a 17.3 percent decline; construction accounts for nearly a third of the lost jobs.

Employment services, a category that includes temporary-help agencies, fell by 1,600 jobs last month. Financial activities lost a net 1,100 jobs, as declines in banking and insurance were partially offset by a 700-job increase in real estate and rental leasing.

Software employers, until recently a stabilizing force in the economy, shed 500 jobs in May. The aerospace industry cut 100 jobs in the month.

Another 13,900 people statewide reported being without work in May, bringing the total number of unemployed Washingtonians to 327,430.

Around the state, Whitman County reported the lowest unemployment rate, 5.3 percent (not adjusted for seasonal variations). Pend Oreille County had the highest rate at 14.7 percent.

Unemployment is likely to worsen further this year, even if the economy hits bottom and starts to recover. That's partly because employers tend to hold off new hiring until they're sure the turnaround is real, and partly because the official statistics don't yet reflect thousands of announced layoffs — particularly in state and local government and schools, whose fiscal years don't begin until later this summer and fall.

If the state jobless rate stays "in the low 9s" for three or four months in a row, Weeks said, he'd be more certain the economy is in fact leveling off.

"But if it jumps up again," he added, "all bets are off."

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