Washington unemployment rate rises in July despite net job gain

When the economy adds jobs, unemployment drops, right?

Not necessarily, as Washington state’s monthly labor market report showed Wednesday. While initial estimates revealed the state added 5,000 jobs from June to July, its jobless rate rose from 8.3 percent to 8.5 percent over the month.

The rise in unemployment stemmed largely from a decline in the state’s total workforce — about 9,700 people — and a small increase in the number of jobless people looking for work, according to the state Employment Security Department.

Joe Elling, chief labor economist for the department, cautioned against reading too much into the uptick in the jobless rate, saying it’s a preliminary one-month estimate based on two different surveys and that the state’s year-over-year numbers show improvement in the labor market.

“We’re getting really good growth out of manufacturing, and that’s connected to aerospace,” he said. “That’s helping to support growth here in Washington, and relatively better than the rest of the nation.”

A year ago — in July 2011 — the state’s jobless rate was 9.3 percent. Since then, Washington’s total labor force has grown by more than 39,000, and the number of unemployed job seekers has shrunk by about 24,500, according to the Employment Security Department. Joblessness in Oregon is 8.7 percent. In the U.S., it’s 8.3 percent.

In Clark County, the preliminary unemployment rate in June was 9.1 percent. But that figure is expected to be revised to roughly 11 percent to account for jobless county residents who previously worked in Oregon. The county’s labor market results for July are slated to be released Aug. 21.

‘Relatively healthy’

From June to July 2012, Washington state’s private sector added 6,300 jobs, marking “relatively healthy” growth of private payrolls, Elling said. However, the public sector lost 1,300 jobs, offsetting some of the private gains and resulting in a net gain of 5,000 jobs over the month.

The state has added a net 57,000 jobs in the 12 months since July 2011.

Overall, 11 sectors grew, one sector shrunk and another saw no change, according to the Employment Security Department. Private sector employment rose 2.7 percent, up an estimated 62,500 jobs.

But total government employment fell by 1 percent, or 5,500 jobs, blunting the private sector gains and leaving a net gain of 57,000 jobs year over year.

In the private sector, industries adding jobs over the year included manufacturing (up 14,100 jobs), professional and business services (up 10,900) and retail trade (up 7,700 jobs).

In the public sector, local governments have cut 2,900 in the 12 months through July 2012, and state and federal governments each reduced payrolls by 1,300 during the same period.

In July, an estimated 298,000 people in Washington were unemployed and looking for work. That includes 139,444 who claimed unemployment benefits last month. Also in July, 4,212 unemployed workers ran out of jobless benefits, bringing the total to 105,240 since extended benefits were activated in July 2008.

Aaron Corvin: http://twitter.com/col_econ; http://on.fb.me/AaronCorvin; 360-735-4518; aaron.corvin@columbian.com