Until now, a strong Seattle-area economy has led Washington out of the recession, accounting for 70 percent of the state’s job growth since 2010.
But the local jobs engine faltered in August as employers curtailed hiring and 6,500 more people reported being out of work.
The Seattle area, which includes Bellevue and Everett, lost 4,300 jobs during the month, data released Wednesday by the Employment Security Department show. In contrast, employers statewide created 5,300 jobs in August.
As a result, the area’s unemployment rate jumped to 5.2 percent from 4.8 percent in July. Not since the depths of the recession has local joblessness risen four-tenths of a percentage point in a single month.
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The Seattle-area manufacturing sector posted the biggest loss, down 1,600 jobs. It was followed by leisure and hospitality, down 1,500, and professional and business services, down 1,000.
Local economist Dick Conway noted that aerospace companies alone shed 600 jobs, reflecting recent layoffs at Boeing. Even so, he dismissed the surge in joblessness as a statistical anomaly.
Previous unemployment rates of 4.8 percent or less in May, June and July “were too low,” he said, and the loss of 4,300 jobs after an increase of 13,400 jobs a month earlier strikes him as unlikely.
Instead, Conway said he is focusing on average employment over the past eight months, which is up 3.1 percent from a year ago, nearly twice the national growth rate of 1.7 percent.
“Despite the fuzziness of the numbers, employment growth is strong, and our unemployment rate is low,” Conway said.
The state’s labor economists also downplayed the negatives in Wednesday’s report, saying the data are preliminary and subject to revision.
State rate ticks up
Statewide, the unemployment rate climbed to 7 percent from 6.9 percent in July as job growth slowed and the ranks of unemployed increased by 1.2 percent.
In another troubling sign, Washington’s labor force shrank by 9,000 people, suggesting that many job seekers became discouraged and stopped looking.
Nationwide, unemployment declined to 7.3 percent from 7.4 percent in July.
The state’s private-sector employers added only 2,800 jobs during the month, while government payrolls increased by 2,500, mostly in K-12 education. That net gain of 5,300 jobs was down from an increase of 10,700 in June and 6,800 in July.
Both the state and local jobs numbers are adjusted for seasonal variations.
“Statewide, our steady job growth has decelerated a little in the past couple of months,” state labor economist Paul Turek said in a statement.
Among the local sectors that added jobs in August were information services, up 800; retail trade, up 300; and wholesale trade, up 200.
Anneliese Vance-Sherman, a regional labor economist at the Employment Security Department, said the local jobs recovery remains on track.
“It’s not going to look that way this month, but the broader picture points to growth,” she said. “We’re still a bright spot.”
The Seattle-area economy has recovered all of the 121,900 jobs it lost in the Great Recession and is up 1,700 jobs over its pre-recession peak, she said.’
Not keeping pace
Still, that’s not enough to accommodate an additional 84,000 people who have joined the labor force since 2008. And at 5.2 percent, local unemployment remains well above its pre-recession record of 3.6 percent.
If you count people who can only find part-time work or are too discouraged to even look for a job, the unemployment rate is much higher — nearly 16 percent statewide as of the second quarter, according to the U.S. Bureau of Labor Statistics.
Bellevue career counselor Jan Reha said strong growth in the local technology sector masks a still-struggling economy, with jobs especially scarce for recent college or high-school graduates and jobless workers over 50.
“Everyone wants at least two years of current, up-to-date work experience, and they can demand it,” she said. “Companies don’t have time for training. That’s the conundrum.”
Vince Holt, president of Management Recruiters on Mercer Island, said employers are more careful about whom they hire, a trend that began with the recession and continues today.
“Over the past five years, hiring processes have slowed down a lot,” he said. “Employers aren’t trying to put bodies into positions. They’re truly trying to get results.”
Even so, he describes the local job market as “really hot” and believes the recovery is well under way — at least for workers with in-demand skills.
“There are job openings at almost every company,” Holt said.
“Finding the talent that’s willing to leave where they are is very difficult.”
Amy Martinez: 206-464-2923 or firstname.lastname@example.org. On Twitter: @amyemartinez