Healthier Boeing helps brighten employment picture

The Washington jobless rate rose to 6.2 percent last month, but the statewide economic recovery remained on track, helped by a healthier Boeing and rising business investment, according to regional economists.

In August, the local economy neither surged nor plummeted, essentially remaining flat, Seattle-based Employment Security Department economist Roberta Pauer said yesterday. The state shed 6,800 jobs, but 6,500 of those losses were in local government and education and influenced by the timing of seasonal hiring, Pauer added.

Overall, the recovery has been marked by jumps and starts, with the economy creating plenty of new jobs one month and very few the next. So, economists expect the recovery to hold.

"After last month's extremely strong hiring (a revised 10,100 net new jobs in July) a 'flat' August, in which hiring kept up with normal seasonal needs, is not bad at all," Pauer said in an analysis released yesterday.

The jobless rate inched up to 6.2 percent in August from 6.0 percent in July, once many seasonal factors are removed, the Employment Security Department reported.

Despite the rise, the economy is improving and the improvement is actually helping to push up the unemployment rate. The 38,700 new jobs created since February drew discouraged residents back to their job searches, according to Pauer's analysis. The new entrants, in turn, can increase the number of unemployed because the unemployment rate only counts active job seekers, economists say.

The competition makes it harder for some residents to find work. Lorraine Fernandez, for example, is still looking for a job while she goes to school for technical training

"It's still the same," Fernandez, 25, said as she entered the WorkSource Center on Rainier Avenue. "It sucks."

But the future looks brighter for Fernandez and others. The regional economy is projected to continue improving.

In fact, the Washington economy is expected to be one of the strongest in the nation in the coming 12 months, according to Economy.com. The Boeing Co. has stopped its massive layoffs and is prepared to begin hiring thousands of workers in the region. Business investment also is picking up, which will likely help software sales at Microsoft Corp., and both developments should help fuel growth, Economy.com senior economist Gus Faucher pointed out.

Rising oil prices and mortgage rates and the ongoing Iraqi war pose threats to the recovery, according to The Puget Sound Economic Forecaster.

"But, in general, the outlook calls for clear sailing in the foreseeable future," local economists Dick Conway and Doug Pedersen recently wrote in the publication.

They predict the regional job base will grow 1.4 percent this year and 2 percent in 2005.

The outlook is bolstered by Seattle employers who are more optimistic about hiring in the final three months of the year, a new survey found.

Among businesses surveyed, 17 percent plan to add staff during that time period, Manpower Inc. reported. During the same period a year ago, only 13 percent expected to increase hiring.

Manpower highlighted durable goods manufacturing, finance and real estate as among the best markets for new jobs.

Last month, however, things remained relatively stable around Seattle, where the seasonally adjusted jobless rate remained at 5.7 percent, according to data released by the Employment Security Department yesterday. The new rate is a steep drop from last August when it stood at 7.3 percent in Seattle, but little changed from February when it was 5.8 percent.

In Tacoma, the unemployment rate was 6.3 percent last month, down slightly from 6.5 percent the month before. The rate in Bellingham was virtually unchanged, as it fell from 5.3 percent to 5.2 percent. Neither number is adjusted for seasonal changes, however.

Around the state, manufacturing lost more than 1,000 jobs last month, while construction firms and leisure and hospitality concerns shed another 500 each. Retail trade added hundreds of workers.

While economists did not read too much into the statewide increase in the unemployment rate, they will be watching to see what happens next month.

"If you saw the same number next month then it would suggest there is more going" on, Conway said.

P-I reporter Paul Nyhan can be reached at 206-448-8145 or paulnyhan@seattlepi.com

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