Washington state lost 10,500 jobs in June; posts 9.3 percent jobless rate

A new report on statewide joblessness offered a glimmer of hope Tuesday that the worst of the recession is over for Washington's workers: The average monthly job loss for the April-through-June quarter was far below the first three months of 2009.

But the report also offered cause for concern: Job losses picked up in June as all but a handful of business sectors pared payrolls, ensuring one of the most difficult job markets in decades for new college graduates and teens in search of summer work.

Washington lost 10,500 nonfarm jobs in June — 3,800 more than in May and triple the number in April — pushing the state unemployment rate to a seasonally adjusted 9.3 percent last month, the Employment Security Department said.

Joblessness rose from a downwardly revised 9.1 percent in May and just below the U.S. rate of 9.5 percent in June.

"The second quarter looks better, but if you look within the second quarter, the months got progressively worse," Greg Weeks, who heads the department's labor-market information office, said in a conference call with reporters. "I would hope the longer-term trend is what we're seeing in the quarterly data."

At the University of Washington's Career Center, job postings are off about a third from a year ago and would be down more if not for internships, said director Susan Terry.

Although the career center has seen an uptick in graduate students seeking help finding jobs, the reverse has been true among departing undergraduates.

"What happens in this kind of a market is our younger students think, 'OK, I'm going to graduate school or keeping my barista job.' They think the job market is so poor that there's no chance for them," Terry said. "What we say to them is, 'Yes, it's tough, but there are jobs.' "

In the Seattle-metro area, joblessness rose to 9.1 percent on a non-seasonally adjusted basis, or 8.8 percent seasonally adjusted. The non-seasonally adjusted rate was up from May's revised 8.2 percent.

Snohomish County's non-seasonally adjusted rate hit double-digits, at 10.1 percent.

Even so, the Seattle area added 5,700 nonfarm jobs in June, with more-than-expected hiring in the leisure and hospitality sector, said Desiree Phair, the state's regional labor economist for Seattle-King County.

Because the unemployment rate is a measure of the number of people without work and actively looking for jobs, a hiring pickup doesn't always translate to a lower rate, especially in June, when students graduate or break for the summer and enter the work force.

At the same time, the unemployment rate does not count part-time workers who want full-time jobs or the so-called underemployed and discouraged job seekers.

"Young people are competing with so many more people for entry-level jobs," said John Challenger, CEO of the Chicago-based outplacement firm Challenger, Gray & Christmas. "People who graduated in the last few years are coming back and taking new 'first' jobs after the paths they followed in better economic times dead-ended."

Joblessness in the Seattle area, which includes Bellevue and Everett but not Tacoma, is at its highest point since at least 1990, the earliest year for which data is publicly available.

The local unemployment rate fell as low as 3.4 percent in April 2007 after a previous high of 7.1 percent in February 2003. The area's unemployment rate hit double-digits during the 1981-82 recession, still above current levels, Phair said.

Over the past 12 months, Washington lost 117,800 jobs, a 4 percent drop. A year ago, the state unemployment rate stood at 5.2 percent.

Around the state, Skamania County in the southwest had the highest unemployment rate, 13.5 percent, while San Juan County had the lowest rate, 5.4 percent.

Only two sectors posted job gains statewide: Leisure and hospitality added 500 jobs in June (adjusted for seasonal variations), while professional and business services created 100.

Three sectors — mining and logging, wholesale trade, and manufacturing — had no payroll changes from May to June.

All other major sectors shed jobs, with government, retailers and construction with some of the biggest losses.

"You're seeing people getting laid off in the retail sector and restaurants, which is the impact of other people being laid off and not spending in those categories," said Joseph Phillips, dean of Seattle University's Albers School of Business and Economics.

"I'd be surprised if this is the last month that the unemployment rate goes up," he said. "People will continue to experience layoffs, but I think it's going to be at a slower pace, and we'll hit bottom in the next six months."

On a year-over-year basis, education and health services made up the state's strongest sector, with a gain of 7,100 jobs, though that was partly offset by a loss of 1,200 jobs in June. Government jobs fell by 4,600 in June but were up 4,900 from a year ago.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com