State's unemployment rate dips to 9.1 percent

Washington state's economy added more jobs than it lost in July, ending seven straight months of declines and nudging the unemployment rate down to 9.1 percent, the Employment Security Department said Tuesday.

But economists warned against reading too much into the July numbers, saying one month of positive data is not enough to signal a turning point in the recession, nor does it mean double-digit unemployment no longer is possible.

"It may be a while before we see steadfast recovery," said Dave Wallace, a state labor economist. "It's likely we're going to see ups and downs over the next six months to a year. It does take a long time to recover from these things."

Joblessness statewide fell from 9.2 percent in June, keeping it below the national average of 9.4 percent last month.

Washington gained about 4,000 nonfarm jobs, as growth in education, health care, professional services and government offset continued declines in construction, finance and manufacturing. July marked the first month of statewide job growth since last November 2008, according to Tuesday's report.

Still, the state had 123,200 fewer jobs than a year ago, and an estimated 315,853 people were out of a job and looking for work. A year ago, the jobless rate was 5.3 percent.

Last week, members of the state's WorkSource office in Lakewood had to cut off a line of people seeking jobs at the upcoming Puyallup Fair after being overwhelmed by applicants. Some 4,000 people sought jobs in retail sales, game and booth operations, cleanup and more.

"Most years, it's like pulling teeth to get people to come out" to apply for jobs, Puyallup Fair spokeswoman Karen LaFlamme said.

"This year, when we announced we would have 3,000 jobs, 4,000 people showed up on opening day, and you can't process that many people."

Tempers flared when one applicant thought another had cut in line.

"After that, we began handing out numbers to the first 600 people in line and asked anyone else to come back the next day," LaFlamme said.

Wallace said he expects many employers will hold off on hiring until they're certain an economic recovery has taken hold.

What's more, because the unemployment rate measures the number of people looking for a job without a success, last month's decline does not reflect a possible increase in workers who've given up searching until the economy turns around, he said.

"Presumably there's a lot of discouraged workers, and as things get better we'll see a lot of them re-enter the labor force," he said, noting that the effect can work both ways — suppressing the unemployment rate in bad times and driving it up in better times.

"When they do that, they'll enter as an unemployed person, which would bump up the unemployment rate," Wallace said.

For now, the more likely scenario is that some people who consider themselves unemployed are not counted as such.

In the Seattle metro area, the unemployment rate ticked up to 8.9 percent in July from 8.8 percent the previous month, mainly due to a drop in state and local education jobs.

Nationally, unemployment fell to 9.4 percent from 9.5 percent in June. Even so, economists said they're not ruling out 10 percent unemployment.

"Certainly three months ago, I was betting on it," Wallace said. "It's still possible, but it's also possible we won't get to double-digits."

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