Regional experts wary about trend in unemployment rate

Although some economists said slippage in the national July unemployment rate to 9.4 percent might be a sign the recession may have reached bottom, state and local economists were more cautious, noting the improvement is due to fewer workers, not more jobs.

Eric Swenson, a senior economic forecaster for the Washington Economic and Revenue Forecast Council, said the national rate would have remained 9.5 percent had discouraged workers continued to job-hunt.

The reversal in the unemployment rate would be a “positive surprise” if genuine, Swenson said, but he expects the job market to erode for a few months more.

Idaho’s unemployment rate rose to 8.8 percent in July, and Coeur d’Alene’s to 10.3 percent, according to state Labor Department statistics released Friday.

The state rate was the highest in 26 years.

Department analysts attributed the increase from June’s 8.4 percent and last July’s 4.9 percent to an expansion of the labor force as more people seek work. Employment in Coeur d’Alene, at 20,783, increased by about 240 jobs compared with June, but the labor force grew by more than 450.

Washington’s unemployment numbers for July will not be released until next week. The June rate was 9.3 percent, up from 9.1 percent in May but considered encouraging because employers were shedding jobs at a slower rate.

The Spokane County unemployment rate was 8.9 percent in June.

Doug Tweedy, regional labor economist for the Employment Security Department, said he does not yet know what July’s rate will be, but he noted that WorkSource reported an increase in job postings during the month.

Washington lost 117,800 jobs between June 2008 and June 2009.

Eastern Washington University professor Grant Forsyth said many of the jobs that have been lost nationally were created by a bubble economy based on debt.

“It’s going to take a while for the real economy to regenerate those jobs,” he said, adding that economic output will start rising before employment does.

Forsyth said stabilization in the housing and financial industries may be signaling a turnaround.

Avista Corp. economist Randy Barcus also predicted employment numbers will continue to deteriorate. The 0.1 percent improvement reported Friday is statistical “noise,” he said.

Barcus said Global Insight, an economic forecasting company, expects Idaho and Washington to be among the states leading the recovery, but nonetheless does not see employment gains until 2011.

“We’re on a very, very slow recovery,” he said.

The unemployment rate for all of Kootenai County was 9.3 percent. The rate in Benewah County rose to 11.2 percent, in Bonner County 9.7 percent, and in Boundary County 11.4 percent.

At 12.4 percent, Shoshone County’s rate was the highest in the state.