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Updated Thursday, December 20, 2012 at 12:33 PM

State’s jobless rate drops to 7.8 percent in November

By Sanjay Bhatt
Seattle Times business reporter

Washington’s jobless rate fell last month to 7.8 percent, falling below 8 percent for the first time since January 2009, officials said Wednesday, though much of the decline was attributed to about 13,600 people dropping out of the workforce.

The good news of declining unemployment, mixed with bad news about stagnant job growth, feeds continuing uncertainty about the economic outlook for 2013.

But Mayan-doomsday worrywarts and fiscal-cliff pundits notwithstanding, some business leaders are optimistic that this year’s strong wave of hiring in aerospace, construction and other core sectors will continue through 2013.

For instance, construction giant Skanska USA ramped up hiring locally this year for the first time since 2007, adding about 30 white-collar jobs and scores of construction jobs, said Chris Toher, general manager of the Seattle office.

Highway and tunnel projects, an apartment-construction boom and strong demand for more commercial space in Seattle and Bellevue have reversed the bloodletting in the construction industry.

Skanska hired 300 for construction at the Boeing delivery center in Everett and plans to hire about 100 next year at Stone 34, a mixed-use development on Stone Way North in Seattle’s Wallingford neighborhood.

“Our crystal ball tells us we’re expecting to have a very similar year to 2012,” Toher said. And local architecture firms are hiring, too, he said. “If there’s work in the pipeline for us in the future, that makes me very happy.”

Construction added 7,900 jobs statewide over the past 12 months, second only to manufacturing, which gained 10,600 jobs — most of which were generated by Boeing and related aerospace companies.

November’s unemployment rate of 7.8 percent was an improvement over October’s 8.2 percent. The one-month drop was the largest decline since November 1977, officials said.

The Seattle-area jobless rate also fell, hitting 6.9 percent, the lowest level in four years, down from 7.9 percent in November 2011.

But behind the good cheer is the sober reality that during this economic recovery tens of thousands of discouraged Washington job-seekers have given up looking, and many thousands more have exhausted extended jobless benefits.

Many are in their prime working years — between age 25 and 54. Nationwide, about 75.7 percent of this demographic had a job in November, far below a peak of 80.3 percent in January 2007, according to the Economic Policy Institute, a Washington D.C., think tank focused on policies affecting working- and middle-class Americans.

Joe Elling, chief labor economist for the state Employment Security Department, said Wednesday that if all discouraged workers here had continued searching for jobs, the state unemployment rate would be closer to 10 percent.

“We’re still so far from where we’d consider this full employment,” Elling said.

Under the broadest measure of joblessness, which includes discouraged workers and part-time workers who want full-time jobs, Washington’s unemployment rate was 17.1 percent as of the end of September, the fifth highest among the states and District of Columbia, according to the federal Bureau of Labor Statistics.

Construction is still 64,600 jobs below the state’s employment peak in February 2008. Manufacturing is down 11,200 jobs, with much of that decline from heavy job losses at mills that make lumber and paper.

According to the state, the number of Washington residents on regular unemployment benefits is still much higher than normal — about 80,000 a month, compared to fewer than 60,000 in 2006 and 2007. (But better than 180,000 in August 2009.)

About 270,000 were jobless and looking for work last month. That includes 135,985 with new and existing unemployment claims in November. An estimated 5,326 jobless workers ran out of benefits last month, officials said.

In November alone, the state’s economy added a meager 1,600 jobs, officials said, with the private sector gaining 2,400 jobs and government losing 800 jobs.

As expected, retail led all sectors for the month in hiring, adding 2,500 jobs, followed by the construction and hospitality sectors, which added 1,400 and 1,200 jobs, respectively.

Surprisingly, professional and business services shed 2,900 jobs over the month, the most of any sector, followed by financial activities, which lost 1,300 jobs. And over the past three months, jobs in real estate and leasing have shed 1,500 jobs, seasonally adjusted state figures show.

Those drops don’t jibe with what Robert Half, a leading temporary-staffing agency, has seen.

Josh Warborg, the company’s district president, said he’s seeing “very nice, steady, healthy growth that is being led by clients who are generally optimistic.”

Record-low mortgage rates have created demand for people in financial services, mortgage processing, accounting and computer-support services, and November was no different, said Warborg.

There are bright spots for job growth heading into 2013, experts say.

“Job growth appeared to slow in November, but the trend of the last three months is very positive,” Elling said, with an annualized growth rate of 2.3 percent.

The state’s minimum wage, which is pegged to the cost of living index, is scheduled to rise by 15 cents to $9.19 on Jan. 1. Washington’s minimum wage will continue to be the highest among the states.

The raise will boost the wages of about 164,000 low-wage workers, almost 6 percent of the workforce, said David Cooper, an analyst at the Economic Policy Institute. These workers will receive an extra $310 a year in wages, the institute estimates.

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






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