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Originally published Thursday, November 15, 2012 at 10:27 AM

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Corrected version

State unemployment report mixed

The state unemployment rate fell in October, but largely because more people dropped out of the labor force, even as the economy added 6,700 jobs.

Seattle Times business reporter

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October’s state employment numbers offered a mixed picture Thursday of the direction of the labor market just before the holiday shopping season.

While the survey of businesses indicated steady job growth, the survey of households that’s used to measure unemployment indicated the rate fell largely because more job-seekers dropped out of the labor force rather than getting hired.

And there was no particular cheer in the forecast for holiday retail jobs.

“We expect holiday hiring to be consistent with what’s been in the past, perhaps a little lower,” said Joe Elling, the state Employment Security Department’s chief economist.

Still, Washington state’s economy added a net 6,700 jobs last month, with gains in almost every sector, from retail to financial services to construction.

The state unemployment rate dipped to 8.2 percent, down from 8.5 percent in September, the department said Thursday. The state’s rate was higher than the national rate, 7.9 percent, and Seattle’s rate of 7.3 percent.

The private sector generated 9,600 jobs in October and the public sector shed 2,900 jobs. Nine sectors expanded, while three contracted.

Retail trade led all industries with a gain of 3,300 jobs. Grocery stores added the most jobs in the sector, though almost all types of businesses hired in October, including car dealers, general merchandise stores and garden-supply stores.

The other industries that notched job gains were professional services, 1,900; financial activities, 1,800; construction, 1,400; manufacturing, 1,400; education and health services, 1,100; transportation, warehousing and utilities, 600; information, 300; and other services, 100.

The sectors that lost jobs were government, 2,900; leisure and hospitality, 1,700; wholesale trade, 500; and mining and logging, 100.

Over the past 12 months, manufacturing — a sector that includes Boeing — led all industries in job gains, adding 12,600 jobs.

Other industries that gained were professional services, 9,000; construction, 7,800; leisure and hospitality, 7,400; retail trade, 6,100; education and health services, 5,800; financial activities, 4,300; and transportation, warehousing and utilities, 3,000.

Elling said that construction’s steady growth was consistent with an uptick in home-construction permits. While construction employment grew 0.4 percent nationally, he said, it increased 5 percent in Washington over the year.

As is often the case, the state revised previous months’ estimates of job gains. September’s job growth turned out to be far more robust than previously thought: The initial estimate of 1,200 jobs was revised to a gain of 6,600 jobs.

But even revisions can be way off. The state also announced that June’s estimate of jobs gained — initially it was 10,200, then revised to 12,200 — turned out to be significantly higher than the “benchmarked” estimate of 8,900 new jobs. The benchmarked number is based on quarterly data from employer tax records.

An estimated 286,000 jobless people in Washington were seeking work last month. That includes nearly 125,000 who claimed unemployment benefits, the state said.

Just under 65 percent of Washington’s population was part of the labor force in October, slightly higher than the national rate of 63.6 percent.

Since 2000, the percentage of the U.S. population that’s working or seeking work has been shrinking. It last peaked at 67.3 percent in early 2000.

Economists trace the decline to baby boomers retiring, fewer teenagers working, and most recently to the shock of the Great Recession.

Although companies have recovered from the depths of the recession, they haven’t been hiring at the same rate as before the recession, said Steve Rose, a senior economist at the Georgetown Center on Education and the Workforce.

“In these crises, companies reorganize and they find out they can do with less ultimately,” Rose said.

Those who have been jobless for more than six months can have the hardest time returning to the labor force. In October, 3,589 jobless Washington workers exhausted unemployment benefits, bringing the total to 115,947 since July 2008, the state says.

Certain groups, such as African Americans and men with only a high-school degree, are dropping out of the workforce at higher rates than the overall population, said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University.

Workers over age 60 with mortgages, by contrast, have delayed leaving the work force because they’ve been affected by depressed property values.

“Most people don’t have very much in retirement savings, so their principal savings is their house,” Van Horn said.

In the Great Recession, Washington state entered its longest and deepest slump since the end of World War II, in terms of jobs lost. The economy has recovered about 60 percent of the 205,000 jobs lost in the jobs recession, officials said, but data show that since June more jobless people have opted out of seeking work.

Meanwhile, nationally, in recent months, said Van Horn, “more people are coming back into the labor market because they’re beginning to sense the economy is improving.”

Sanjay Bhatt: 206-464-3103 or sbhatt@seattletimes.com On Twitter @sbhatt

This story, published Nov. 15, 2012, was updated Nov. 16 to correct the name of Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University.

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