The Tri-Cities lost 400 nonfarm jobs in July, the first month to month decline this year, the State Employment Security Department said Tuesday.

Summer holidays that temporarily reduced the need for employment at schools and colleges, and the end of temporary census jobs largely contributed to the job losses.

But annual nonfarm jobs grew about 3.4 percent, from 96,900 in July 2009 to 100,200 last month, because of gains in the professional and business sector and retail trade.

The Tri-Cities' economy continues to be "stable and steady," said Ajsa Suljic, regional labor economist. Jobs at Hanford and local industries that make value-added agricultural products help keep the economy lubricated, she said.

High-wage jobs at Hanford also help drive consumer spending in the area, resulting in new jobs in the retail, leisure and hospitality industries, she said.

The area's July unemployment rate -- not seasonally adjusted - was 6.3 percent, showing no change from the upward revised rate of 6.3 percent in June. There were 8,840 unemployed workers in the work force of 140,070 last month.

An estimated 1,820 workers dropped out of the labor force and the number of employed workers decreased by 1,750 in July from the previous month.

Yet, the relatively low unemployment rate indicates the Tri-Cities is doing better than the state and the nation, Suljic said.

Private sector employment grew by 800 in July, and since January this sector has added a total of 5,600 new jobs in construction, manufacturing, retail trade, trade, transportation and utilities and food services.

The food processing sector gained about 300 jobs in July to bring the tally of manufacturing jobs to 7,100. The warehousing, wholesale trade and transportation sector also added 400 jobs for a total of 16,800 positions. Much of this seasonal growth involves transporting local agricultural products to satisfy consumer demands, Suljic said.

Compared to previous years, business has picked up since February, said Jeff Davis, owner of Richland-based freight company Dollar Per Mile. His company has been moving onions, apples and frozen fries across the nation.

"It's still tough out there. But it's getting better," Davis said, summarizing his thoughts on the local warehousing and transportation industry. Most jobs in this sector are seasonal, he said.

Agricultural employment in the Tri-Cities declined by 934 jobs in July, compared with a month earlier. That's seasonal, Suljic said. But over the year, the local agriculture industry lost 1,703 jobs.

Suljic said she expects the ag job situation to remain the same in August, and to potentially improve in September.

In Washington, an estimated 306,218 people were unemployed and looking for work in July while about 239,773 people received unemployment benefits during the month.

The state's unemployment rate was 8.9 percent in July. Payrolls were down 2,300 during the month as an estimated 5,400 government jobs, mostly federal census jobs were eliminated. Year over year, Washington had 14,500 fewer jobs last month than in July 2009, a 0.51 percent decrease.

In the past seven months, the state had a total net gain of 19,800 jobs, the bulk of them coming from the private sector.

"It's something of a mixed report," said Dave Wallace, acting chief economist with the state Employment Security Department.

-- Pratik Joshi: 582-1541; pjoshi@tricityherald.com; Business Beat blog at www.tricityherald.com