Washington state drop in unemployment not as rosy as it appears

Statewide unemployment fell sharply in November, dropping below 8 percent for the first time in years, although the state still is far from full employment and job seekers continue to leave the labor force, unable to find work, an economist said Wednesday.

The jobless rate fell to 7.8 percent last month from 8.2 percent in October, according to state Employment Security Department data released Wednesday, the first time the jobless rate has dropped below 8 percent since January 2009.

The state had a net gain of 1,600 jobs in the October-to-November period, with most of those gains tied to seasonal hiring for the holidays.

Retail trade, for example, added 2,500 jobs in the same period, with most of that hiring taking place at clothing and general merchandise stores, Employment Security Economist Joe Elling said Wednesday.

But that’s where the good news ends.

Another reason the jobless rate fell last month is that the labor force continues to shrink. Job seekers have become discouraged and given up, or are choosing not to look, such as those 25 and younger, who have decided to stay in school, he said.

Those 25 or younger also have been squeezed out of positions by older workers who have been unable to find work, Elling said.

A shrinking labor force is a problem throughout the country, he said, although in Washington state, it’s a larger problem outside of the big job creation counties of King and Snohomish.

Elling also said he views the drop to 7.8 percent with some degree of caution.

“We’re still so far from what might be considered full employment,” he said, adding that the benchmark for full employment is 6.5 percent as set by Federal Reserve Chairman Ben Bernanke. Bernanke has said he won’t change national monetary policy until the jobless rate falls to that level, Elling said.

Meanwhile, county jobless results for November will be released Dec. 26. Thurston County’s jobless rate was 6.9 percent in October; Pierce County's was 8 percent.