State Jobless Rate Drops Significantly

State Jobless Rate Drops Significantly

By KOMO Staff & News Services

OLYMPIA - Washington state's unemployment rate dropped dramatically in September to 5.6 percent, the lowest rate in nearly four years.

Economists are split on the significance of the sharp decline. Some say it's good news, indicating the state's continuing economic recovery. Some say it's just a statistical quirk hiding essentially flat employment. Others say it might be a little bit of both.

The 5.6 percent seasonally adjusted jobless rate, announced Tuesday, puts Washington within striking distance of the national unemployment rate, which held steady at 5.4 percent in September. Washington hasn't been that close to the national unemployment rate since June 1998.

The national rate is usually lower than the state jobless rate, which has hovered above 6 percent for most of the year.

State economists credit fall education hiring and a strong apple harvest with most of the improvement.

"The recovery is starting to take hold a bit more, and we're starting to put the recession a little bit more in the rear view mirror," said Greg Weeks with the state Employment Security Department.

Employment Security Commissioner Sylvia Mundy said the decline is good news, but cautioned that weakness in the air transportation industry and oil price increases mean Washington's recovery will continue at a slow pace.

Weeks cautioned that unemployment numbers aren't an exact science: "It may be we're overstating it a little bit."

The state bases unemployment numbers on a sample of 1,350 households. Roberta Pauer, Seattle economist for the Employment Security Department, said the small sample size may have skewed the results.

"The sample has captured some unusual folks by chance and has temporarily pulled the unemployment rate estimate down sharply," Pauer said Tuesday. "The job growth that the state and Seattle have had during our 15-month recovery has plateaued in the last two months."

No private-sector industries posted any significant job gains in September, Pauer noted. Education hiring and the apple harvest might bump the jobless rate down by a tenth of a percent or two, Pauer said, but they don't explain such a dramatic decline.

So is the lower unemployment rate a statistical quirk or a genuine sign of improvement? Could be a little bit of both, said economist Dick Conway, co-publisher of The Puget Sound Economic Forecaster.

"I'm surprised by the number, because you typically don't see a drop like that," Conway said. "On the other hand, the state has been creating quite a few jobs in the past year and we would expect a drop in the unemployment rate."

Because the sample size is small, Conway said he looks skeptically at the monthly unemployment numbers. But he noted the number of jobs in Washington has grown about 2 percent over the past year - and the seasonally adjusted unemployment rate has declined accordingly, from 7.7 percent in September 2003 to 5.6 percent last month.

"In the long run, it's about what you would expect under the circumstances," Conway said.

Unemployment declined across the state, in both rural and urban areas. The lowest jobless rate was in Garfield County, at 1.5 percent. The highest was in Ferry County, at 8.4 percent.

Oregon's jobless rate, meanwhile, remained essentially stagnant in September at 7.3 percent.

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