Recession has cost state one of every 20 jobs

Washington has lost almost 1 out of every 20 jobs since the state's economy began slumping early last year. And it isn't likely to regain them any time soon.

That was the stark message from the latest jobs report released Tuesday by the state Employment Security Department. The report showed Washington's unemployment rate climbing to 9.3 percent, the highest level in decades, from a revised 9 percent in August.

At the peak of the state's most recent economic cycle, in February 2008, there were just under 3 million nonfarm payroll jobs. Since then, 145,400 jobs have evaporated — a decline of 4.9 percent.

Nationally, 7.2 million jobs have vanished since the economy peaked in December 2007, a 5.2 percent decline. The U.S. jobless rate was 9.8 percent last month.

Even though many economists have declared the national recession over, that's cold comfort to people looking for work. Employment is considered a lagging indicator, meaning it can continue to worsen even after the broader economy has turned the corner.

Economists say any recovery isn't likely to translate into new hiring until well into 2010, if then.

"The Washington economy continues to evolve about as expected ... but the upturn we believe is currently under way is fragile," chief state economist Arun Raha wrote in a forecast update issued earlier this week.

Raha said he expects the state to continue shedding jobs through the rest of 2009, with employment growth resuming early next year.

But since new jobs won't be created fast enough for all the people seeking work, the state expects the unemployment rate will continue rising, hitting 9.8 percent and staying there through much of next year.

In the Seattle metro area, the jobless rate held steady at 8.9 percent in September. (The unemployment rate is determined through a monthly survey — not, as is sometimes thought, by counting how many people are receiving unemployment benefits.)

The state has yet to see much in the way of concrete gains from the federal stimulus package.

The construction industry, for instance, lost 2,300 jobs last month, mostly in the nonresidential sectors. Since the beginning of 2008, 50,300 construction jobs — 24 percent of the pre-recession peak — have been lost, more than a third of the state's total job loss.

"It is conceivably possible that we would have seen greater losses without the stimulus spending, but we're still not seeing growth in construction," said Dave Wallace, the state's acting chief labor economist.

All told, Washington employers shrank their payrolls by 16,000 jobs last month.

The biggest chunk of the September decline came in local public schools, which fell by a seasonally adjusted 5,100 jobs. However, Wallace said, that was mostly due to quirks in the way labor economists adjust for seasonal variations in hiring patterns; school payrolls had shown an unusual 4,700-job increase in the previous two months.

Overall, public-school employment actually has increased slightly during the recession.

Other local-government payrolls shrank by 2,000 jobs last month, while state government held steady.

In the private sector, restaurants and bars cut a seasonally adjusted 1,100 jobs. The finance and insurance sector lost 1,300 jobs, and food manufacturing fell by 1,200 jobs.

In the Seattle metro area, defined as King and Snohomish counties, aerospace manufacturing lost 600 jobs last month; the industry is down 3,400 local jobs over the past year.

The metro area's information and high-technology industries, which had been fairly resilient earlier in the recession, now are feeling its effects. Those industries — which include software, telecommunications, computer-systems design and electronics manufacturing — together shed 300 jobs last month, and collectively are down 7,000 jobs over the past year.

The few bright spots statewide included real estate and rental leasing, and doctors' offices and clinics; both added 700 jobs in September. Employment services, a category that includes temp agencies and often is a harbinger of changing economic conditions, gained 500 jobs.

But Wallace cautioned against reading too much into one month's figures: "My instinct is to say, let's wait and see what we get over the next 12 months."

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