Washington loses jobs during May

OLYMPIA -- Eight consecutive months of Washington employment growth came to an end in May as the state recorded hundreds of lost jobs amid concerns that its fragile economic recovery could stall, officials said Wednesday.

The Employment Security Commission pegged Washington's seasonally adjusted jobless rate at 9.1 percent, down slightly from a revised April rate of 9.2 percent.

The state hasn't seen the unemployment rate at 9 percent or below in more than two years, and it has been as high as 10 percent.

The 700-job drop in May was just a small regression compared to the estimated 52,400 jobs the state has added since the low point of the recession.

Still, Dave Wallace, the department's acting chief economist, said he was disappointed by the numbers, especially since they came just a month after the same jobs report showed growth in a broad range of sectors.

"We certainly hope that this is a deviation as opposed to a trend," Wallace said.

Economic forecasters point to a range of factors that could turn stagnant employment into a trend. Wallace said the direction of gas and commodity prices could impact the state's economy along with international influences such as the ongoing financial crisis in Europe and an economic slowdown in China.

State lawmakers are closely watching the numbers, including a key revenue forecast due to be released Thursday. A new state budget approved by the Legislature keeps more than $700 million in reserves to handle revenue declines in the months to come.

Washington's largest employment drops in May came in wholesale trade, which recorded a loss of 2,100 jobs. Other areas that suffered included retail trade (down 1,600), financial activities (down 900) and transportation (down 600).

Leisure and hospitality recorded a large increase in jobs, adding 3,200 positions. The professional and business services sector added 900 jobs while construction employment was up 700.

An estimated 306,919 people were unemployed and looking for work during May, according to state data, and 208,582 people received unemployment benefits from Washington during the same period.