State unemployment rate jumps to 7.8%, surpassing dot-com era |
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State unemployment rate jumps to 7.8%, surpassing dot-com era
Source: Washington State Employment Security Department
Ugh. That big sucking noise might be more jobs disappearing. A report out today shows that the unemployment rate jumped to 7.8 percent last month in Washington state, up from 4.5 percent for the same period last year. That's an amazing reversal of fortune, the largest point increase since the state changed unemployment methodologies in 1976. It also means that more people are out of work in the state than during the dot-com bust era from 2001 to 2003.
During that period, the unemployment rate peaked at 7.7 percent in the Spring of 2002 with 239,230 people out of work. We've still got a ways to go to reach the historical highs of 1982 when the unemployment levels hit 12.2 percent. But given that the rate jumped by 3.3 points on an annual basis, the state is well on its way.
"We are going into new territory here," said David Wallace, an economist with the state. "Most of us saw a recession coming -- and even a difficult one. But it is even worse than we thought."
Once an engine of growth, the information services category lost 3,300 jobs in January, a 3.3 percent decline. That includes the loss of 400 jobs in the software publishing sub-sector. Only the manufactruing industry saw a bigger month-to-month percentage decline, with the industry losing 4.9 percent of its jobs.
Losing the high-paying information services jobs is really bad for the economy, with Wallace saying that they typically have "positive repercussions" throughout the economy. He called it a "downward virtuous cycle" in which global economic problems are coming home to hurt software businesses.
"We thought it was going to be more of a U.S. centric recession, but now it just looks like a U.S. started recession that has gone global," said Wallace. "That effects the information services companies because their markets are global."
And there's even more bad news. During the 2001 recession, home values held up. That's no longer the case, with the report notiing that the state was able to recovery relatively easy since only jobs were lost.
"With the current recession it will be more difficult because both wealth and jobs have been lost," the report said.
The last time the state's unemployment rate hit 7.8 percent? The year was 1982, with Ronald Reagan serving his first term as president.
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