State has surprising job spurt

But economist says Washington is still sputtering

SCOTT WYLAND THE OLYMPIAN

THURSTON COUNTY -- Amid speculation that Washington state's economy will stay in the doldrums at least until 2003, the statewide jobless rate dropped three-tenths of a point to 8 percent in February.

South Sound's jobless rate followed suit, falling to 6.1 percent from 6.3 percent during the month. The rate, which isn't seasonally adjusted, is now identical to the rate a year ago.

Although the surge in employment would seem to defy gloomy forecasts and signal an earlier-than-expected rebound, analysts say the momentum will be short-lived.

"The state economy is still shrinking," said Chang Mook Sohn, the state's chief economist. "So it is not something that is healthy or news to celebrate."

Washington's economic recovery lags behind the nation, and it faces further job losses within the aerospace industry, Sohn said.

The jobless rate will rise again in March and level off late in the year, Sohn said, adding that the state's economy won't fully recuperate until 2004.

Seasonally adjusted

When adjusted for seasonal changes, the state's jobless rate fell from 7.6 percent to 7 percent in February. Seasonal changes include teachers returning to school after the summer and migrant workers leaving after the harvest is finished.

The national jobless rate, also seasonally adjusted, dropped one-tenth of a point in February to 5.5 percent.

February's drop in unemployment resulted from bursts of job growth within government and the service sector, said Paul Turek, the regional economist for the state Employment Security Department.

"Jobs got created, people got hired -- on the whole, it was a nice surprise," Turek said.

But he agrees with Sohn that the state's jobless rate will go up soon and rise until the end of the year.

There's nothing to indicate that February's job gains will continue, Turek said. "The one month seems to indicate a bit of an illusion."

During the three months before February, the state's labor force shrank, partly because people left the state to find work elsewhere, Turek said.

Some unemployed workers also gave up looking for a job, preventing them from being officially counted as out of work, Sohn said.

These two things could result in the jobless rate being skewed low, Sohn said. If fewer people are on record as searching for a job, then the jobless rolls appear to shrink, he said.

"It is not because the economy is creating jobs that we have unemployment declining," Sohn said.

Typically, employment will be the last thing to bounce back during an economic slump, Turek said. Employers want to make sure their cash flow is healthy before they rehire workers, he said.

Neither Sohn nor Turek could say how the state's tentative plan to cut about 1,000 jobs in the 2001-03 supplemental budget will affect South Sound.

Mason County's jobless rate also had a healthy drop in February, from 9.9 percent to 8.8 percent.

That county is much more dependent on manufacturing than Thurston, which has a heavy government job base, Turek said. So it will fall in line with most of the state.

Still, things could be looking up for areas such as Mason County, Turek said. "We should start to see manufacturing make some strides."

Thurston County lost 100 jobs in retail and wholesale trade while gaining 300 jobs in services and 500 in government.

The state's jobless rate is likely to keep rising, even after the economy begins recovering, Turek said. That would reflect a job market not growing fast enough to meet demand.

"It means our economy is picking up, but it's not on fire," Turek said.

February jobless rate

- Thurston County: 6.1 percent

- Mason County: 8.8 percent

- Lewis County: 9.4 percent

- Grays Harbor County: 10.6 percent

- Washington state: 8 percent

Source: State Employment Security Department

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