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2% decrease in county jobless rate a mirage

By , Columbian Business Editor
Published: March 8, 2011, 12:00am

Does it feel like Clark County’s unemployment rate dropped by two percentage points in a single month?

If not, your instincts are better than the January unemployment numbers that were released Tuesday by the state Department of Employment Security. The department’s report shows the county’s unemployment rate at 10.6 percent — an astonishing decrease from December’s 12.7 percent and an unbelievable improvement from last January’s 15.7 percent jobless rate.

Unbelievable is right. “This preliminary rate substantially understates unemployment in January,” said Scott Bailey, the Employment Security Department’s regional economist for Southwest Washington. When all is said and done, he said, unemployment could be two percentage points higher than the number released Tuesday — in other words, right about where it was in December.

Before explaining why the state would issue a number so clearly inaccurate, it’s worth noting that the report does contain useful new information about the county’s economy. The county is showing a wisp of economic recovery, adding 100 non-farm jobs in January, Bailey said. “It’s a small number, but at least it’s positive,” he added.

Still, total employment of 124,200 in the county was down 700 jobs over the year. Construction and mining is down 800 jobs for the year, and all other industries are close to where they were a year ago. The county has lost 9,600 jobs from the pre-recession peak, Bailey said.

Initial claims for unemployment have remained essentially flat for the year, Bailey said, with 2,837 new claims filed in January. Extended claims, filed by people who have already been on unemployment for six months, were unchanged from December.

As for that unexpectedly low unemployment rate, the statistical problem stems from the unique challenge of correlating information from Oregon with Washington’s own numbers, Bailey said. Until now, the state Department of Employment Security developed an estimate of how many Clark County residents would file unemployment claims in Oregon. In pre-recessionary times, those numbers were small, so the estimates were reasonably accurate. But as unemployment climbed, the estimates could be off by as much as one percentage point, requiring later adjustments in the monthly unemployment rate, Bailey said.

That was challenging enough, but now the U.S. Bureau of Labor Statistics has declared that Washington can no longer use these estimates of unemployment claims. Because Oregon completes its count well past Washington’s release date for county unemployment statistics, the federal ruling further reduced the accuracy of the Clark County estimate, Bailey said. About 60,000 Clark County residents work in Oregon, and Bailey predicts that the number of unemployed Clark County residents could rise by at least 4,500 when the final unemployment count is in from Oregon.

To the north, Cowlitz County added 100 non-farm jobs in January, helped in part by the opening of a Walmart in Woodland, which helped push retail employment up by 100. Construction fell by 300 jobs and government employment, including schools, dropped by 200 jobs. Cowlitz County’s unemployment rate, not likely to be influenced by jobless claims in Oregon, is estimated at 12.8 percent, down two points from a year ago.

Wahkiakum County lost 40 jobs, mostly in construction and logging. An estimated 240 residents were unemployed in January. The county’s unemployment of 15.3 percent is the state’s second-highest, but that rate has dropped by more than a point from a year ago.

Washington’s unemployment rate fell slightly to 9.1 percent in January, and is now about the same as the nation’s. Washington added 11,000 jobs in January, mostly in areas of professional and business services and health care. Oregon’s unemployment rate was 10.4 percent, with 10 percent unemployment in the Portland metro area. Oregon added 6,300 jobs in January.