Unemployment rate falls to 6.5 percent in January

Washington’s preliminary seasonally adjusted unemployment rate for January fell eight-tenths of one percentage point, from a sharply revised 7.3 percent in December to 6.5 percent, Employment Security Commissioner Sylvia Mundy announced last week.

The nation’s seasonally adjusted unemployment rate was essentially unchanged at 5.7 percent. Washington’s non-adjusted unemployment rate remained at December’s upwardly revised 7.2 percent.

“January continued a mild but positive trend in our job market,” Mundy said. “While the preliminary unemployment rate estimate may overstate the case, the overall employment and unemployment numbers reflect the continuing improvement that began last fall. The household survey data reveal that nearly 45,000 jobs have been created in the past year.”

Washington’s nonagricultural wage and salary employment decreased by 57,000 jobs over the month. Expected seasonal layoffs dominated the declines with all major sectors shedding jobs: construction (-7,500), manufacturing (-3,000), wholesale trade (-1,800), retail trade (-15,800), transportation and warehousing (-1,900), information (-1,000), financial activities (-1,200), professional and business services (-5,900), education and health services (-3,600), leisure and hospitality (-7,500) and government (-6,200).

While generally all sectors decline at this time of year, many sectors declined by less than expected. Manufacturing, for example, fell by 3,000 compared to last year’s drop of 7,100, an improvement driven by fewer layoffs in aerospace manufacturing.

Computer and electronic production added about 100 jobs when moderate layoffs were expected, indicating things may be turing around in that industry.
Food and beverage firms let go fewer workers this year than expected (-1,100), reflecting fewer seasonal hires than expected.

However, some sectors laid off more workers than expected. Financial activities-related business actually dropped 1,200 positions this year compared to an increase of 800 last year, which may augur the end of the homes refinancing boom.

Wholesale trade also dropped jobs at a greater rate than last year, down 1,800 versus 1,000.

Over the year, jobs were up 20,400, for an increase of .8 percent. This is up slightly from a revised over-the-year increase of 16,800 in December. The job losses in manufacturing are down to 11,600, the lowest year-over-year exchange since before the recession started. All other major industries were up over the year, except for leisure and hospitality, which lost 400 jobs, and information, which was flat over the year.

At the start of the year, the Tacoma metropolitan area (Pierce County) unemployment rate stands a tick below the statewide rate of 7.2 percent. Tacoma’s rate of 7.1 percent continues above (0.8 point) the comparable (not seasonally adjusted) rate for the United States. Unusual seasonal trends this year may account for the relative strength of the Tacoma rate compared to the U.S. rate.

While place of work employment declined over the month, it still remained up over the year. Construction was a positive factor, as manufacturing remained slightly off compared to this time last year. Services providing employment, which includes retail trade, was up over the year, but not as strongly as could be expected. This might be related to the departure of several thousand soldiers from Fort Lewis to participate in the military campaign in Iraq, with a resulting decline in the size of the local retail economy.