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State jobless rate tops 5 percent

Slowing home construction and a weakened retail sector last month pushed Washington’s unemployment rate above 5 percent for the first time since October 2005.

The 0.6 percent increase to 5.3 percent, seasonally adjusted, was also worse than the 0.5 percent jump to 5.5 percent reported earlier this month for the nation as a whole. Much of the damage was done in the Seattle-Bellevue-Everett area, where the rate climbed 0.7 percent to 4.1 percent.

Spokane’s jobless rate also increased last month, but much more modestly.

Without adjusting for variations in weather and seasonal events like the end of the school year, King and Snohomish counties combined lost more than 14,000 jobs – half the state’s total decrease – from April to May.

The unadjusted King County unemployment rate climbed 0.8 percent to 3.9 percent, and Snohomish County climbed 1 percent to 4.6 percent.

Dave Wallace, acting chief economist for the state Employment Security Department, said Seattle-area retailers have been laying off employees, as have contractors.

Construction employment in Washington fell by 500 workers from April to May, he said, and 2,100 since last May. The year-over-year decline was the first since October 2002, when Washington was still recovering from the economic shock of the Sept. 11 attacks.

Wallace said May’s job losses may indicate the forces that have slowed growth in other regions are finally catching up with Washington, which had been sustained by aerospace employers.

“We can’t help but be affected,” he said.

Manufacturing employment was flat in May. Professional and business services, as well as information jobs, increased. Education and health services were down.

Washington’s unemployment rate bottomed out at 4.4 percent in March and April 2007. Despite the increase since then, the rate remains below the average of 6.9 percent since 1976, and far from the record 12.2 percent in November 1982.

Spokane County’s labor market held up better than the state’s last month. The county shed fewer than 1,800 jobs, which raised the unadjusted unemployment rate 0.2 percent to 5.3 percent.

Doug Tweedy, ESD labor market economist for the area, said construction jobs are off by 400 since May 2007, but increased in May over April as commercial building has offset the slowdown in residential construction.

Retail and wholesale trades have added 800 jobs, he said, thanks to continued spending by farmers and Canadians whose dollars trade at par.

Tweedy said employment trends in May usually hold for the rest of the year, but bad weather this year will probably make June a truer indicator.