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The seasonally adjusted number of unemployed rose by 25,700 in February, reflecting an increase of 9.4 percent over January�s unemployment level. The seasonally adjusted unemployment rate for Washington rose by 0.6 percentage points to reach 8.4 percent. This is the highest state unemployment rate since June of 1985 and it is the second consecutive month where the state has a higher rate than the nation.

During the first 12 months of the recession that began in 2001 (March 2001 to March 2002), industry employment losses equaled 72,000 or 2.7 percent. This is worse than the first 12 months of the current recession (December 2007 to December 2008) when employment losses totaled 50,100 or 1.7 percent. However, employment declines have accelerated since December of last year whereas employment grew in most of the months following March 2002 as the economy recovered from the recession. During the 2001 recession, home values did not decline substantially which means that many people retained the wealth they accumulated in their property. After that recession Washington�s recovery was relatively easy because only jobs were lost. A recovery from the current recession will be more difficult because both wealth and jobs have been lost.

Seasonally adjusted, total nonfarm employment in Washington recorded a monthly 1.0 percent loss of 28,200 jobs in February, reaching a total of 2,876,200. Total nonfarm employment for January was revised downward from 2,913,100 to 2,904,400. Given the volatility of monthly changes at this time, it is useful to keep track of the quarterly and year-over-year changes. For the year ending in February, job losses totaled 97,100 (-3.3 percent). Sixty-two percent of these losses occurred within the last three months; eighty percent occurred since September 2008.

Year-over-year, Washington shed 45,200 jobs in its goods-producing sector for a percentage decline of 8.8 percent. Within this sector, construction employment declined by 24,100 jobs (-11.6 percent). Employment in manufacturing decreased by 20,400 (-6.8 percent); and mining and logging lost 700 jobs (-9.0 percent).

The services-providing sector exhibited a net loss of 51,900 jobs for the year (-2.1 percent), of which 39,900 jobs were lost during the last three months. Citing the losses for the year, retail trade lost 17,100 jobs (-5.2 percent), with 20.5 percent lost during the last three months. Professional and business services lost 20,100 jobs (-5.7 percent); Washington�s financial activities shed 4,300 jobs (-2.8 percent). Citing two relatively large gains for the year, social assistance within the education and health services industry gained 1,600 jobs (+2.7 percent), but lost 900 jobs over the last three months (-1.5 percent). Software publishing, within the information industry, gained 3,000 jobs (+6.1 percent) over the year, and exhibited no changes over the last three months.

In the government sector, employment increased by 5,000 jobs (+0.9 percent) over the year ending in February; but it shed 3,600 jobs over the last three months. Local governments, many of which cut their operating budgets over the year, added 600 jobs for the year; but they shed 3,400 jobs over the last three months. Federal and state government added 1,600 jobs and 2,800 jobs for the year, respectively. However, over the last three months, the number of federal jobs increased by 400 and state government jobs declined by 600.

With few exceptions, February�s monthly employment estimates continue to reveal job losses in both the goods-producing and services sectors.

Washington�s economy, as measured by February employment in most of its industries, appears to have slid deeper into the trough of an economic cycle. The employment indicators for durable goods suggest that consumers are waiting on the sidelines for clearer signs that the stimulus packages will provide jobs, and that a stable financial system will allow them to purchase big ticket items at lower rates of interest. Therefore, monthly employment growth over several consecutive months in durable goods, construction, and financial services may signal a turning point for the economy during this recession.

Nonfarm payroll employment declined to 2,876,200 by 28,200 (-3.3 percent year-over-year) in February. A revised estimate for January brought nonfarm payroll employment down from 2,913,100 million to 2,904,400, a decrease of 0.3 percent.

February monthly estimates reveal no job gains in any area of the goods-producing sector of the economy. This sector employed 468,500 people as of February, reflecting a year-over-year decline of 45,200 (-8.8 percent). In addition, employment declined by 6,700 (-1.4 percent) over the month. Construction and manufacturing account for most of the employment in this sector.

Construction jobs totaling 183,800 as of February have been the driving force behind declining goods-producing payrolls. Payrolls fell by 24,100 (-11.6 percent) for the year and by 4,200 (-2.2 percent) for the month. The majority of the job losses in the construction sector for the year came from residential specialty trade contractors. Specialty trade contractors totaling 118,500 in February, accounted for a yearly decline of 12,100 jobs (-9.3 percent) and a monthly decline of 2,700 jobs (-2.2 percent). Residential specialty trade contractors accounted for 8,100 of these losses.

Construction of buildings saw a year-over-year employment decline of 8,100 (-15.1 percent). Residential building construction accounted for 5,600 of these job losses over the year (-18.5 percent) and 600 jobs over the month (-2.4 percent). A more modest yearly decline of 3,900 was seen in heavy and civil engineering.

In February 2009, manufacturing employment stood at 277,600; and the year-over-year job losses totaling 20,400 (-6.8 percent) appear to be on the rise. For the month of February this industry shed 2,500 jobs (-0.9 percent). Within manufacturing, job losses were concentrated in the durable goods sector: 13,200 jobs (-6.1 percent) over the year and 1,900 jobs (-0.9 percent) over the month.

Employment in mining and logging that stood at 7,100 in February reflected a loss of 700 (-9.0 percent) over the year; but no job losses were reported for February.

The major industries listed within the services sector and their February employment levels are: trade, transportation, and utilities (532,000 jobs), information (102,800 jobs), financial activities (150,500 jobs), professional and business services (329,600 jobs), education and health services (354,500 jobs), leisure and hospitality (283,400 jobs), and other services (107,300 jobs). Each of these industries is discussed below.

Within the trade, transportation, and utilities sector, for the year and month ending in February, job losses totaled 27,200 (-4.9 percent) and 4,900 (-0.9 percent), respectively. The retail trade component that accounts for roughly 58.7 percent of the trade, transportation, and utilities sector shed 17,100 jobs (-5.2 percent) for the year and 1,000 jobs (-0.3 percent) for the month. The wholesale sector lost 6,400 jobs (-4.9 percent) for the year and 2,400 jobs (-1.9 percent) for the month.

Within the information services, employment shed 1,000 jobs (-1.0 percent) for the year, but gained 400 jobs (+0.4 percent) in February. Employment in the software industry may be a bell-weather for general economic conditions for the remainder of the recession because of its presence in global markets. Employment in this industry totaled 52,200 jobs, reflecting a 12 month increase of 3,000 jobs (+6.1 percent) with a slight gain of 100 jobs (+0.2 percent) in February. Employment in the financial activities industry shed 4,300 jobs (-2.8 percent) for the year and gained 1,200 jobs (+0.8 percent) for the month. February�s job growth in this industry was accounted for by credit intermediation and related activities.

Professional and business services shed 20,100 jobs (-5.7 percent) for the year and 13,400 jobs (-3.9 percent) for the month. In fact, this sector accounted for 47.5 percent of all the job losses for the month of February. Within this sector, administrative support and waste management remediation shed 13,600 jobs (-9.1 percent) for the year and 9,100 jobs (-6.3 percent) for the month. Education and health services, one of the few industries to exhibit job growth for most of 2008, exhibited a decline of 2,700 (-0.8 percent) for the year and a decline of 3,500 (-1.0 percent) for the month. Leisure and hospitality services lost 1,800 jobs (-0.6 percent) for the year and 600 (-0.2 percent) jobs during February. Other services classified in this report as such, gained 200 jobs (+0.2 percent) for the year and 100 jobs (+0.1 percent) during the month.

Employment in government totaled 547,600 in February, reflecting year-over-year growth of 5,000 jobs (+0.9 percent) and losses of 800 jobs (-0.1 percent) during February. Federal government jobs totaling 71,000 as of February reflects a gain of 1,600 jobs (+2.3 percent) for the year, and a gain of 200 jobs (+0.3 percent) for the month. Employment in state government totaling 154,400 in February increased by 2,800 (+1.8 percent) year-over-year and by 100 jobs (+0.1 percent) over the month. Local government totaling 322,200 in February gained 600 jobs (+0.2 percent) year-over-year, but lost 1,100 jobs (-0.3 percent) during the month.

In summary, job losses in Washington�s goods-producing sector took its toll on Washington�s employment situation for most of 2008, with losses concentrated in the construction and durable manufacturing industries. This trend has continued in 2009 because the U.S. financial sector has not fully recovered. Employment growth in the private services industry mitigated losses in the goods producing sector for most of 2008; but currently most of the private service industries have been impacted by the recession. Although professional and business services started to shed jobs consistently after August 2008, a significant month-over-month decline occurred in February. In addition, education and health services, one of Washington�s most recession-resistant industries, exhibited the largest monthly decline in jobs since the beginning of the current recession. Therefore, as of February, the overall employment trend in Washington is downward. Job growth in the durable goods sector, the financial services sector, and construction may signal the beginning of a recovery period.

Washington�s seasonally adjusted unemployment rate rose to 8.4 percent in February. The February rate was 3.7 percentage points higher than last February�s 4.7 percent unemployment rate.

On a seasonally adjusted basis, total unemployment climbed 9.4 percent in February from January to a level of 299,000. This is a clear indication that labor markets in Washington are struggling as much, if not more than the nation as a whole.

Reconciling the Differences Between Nonfarm Payrolls and Household Employment

The chart (see page 5 of the full Employment Situation Report) shows seasonally adjusted employment estimates from the Current Employment Statistic (CES), Local Area Unemployment Statistics (LAUS) programs, and LAUS employment adjusted for CES definitions � for Washington state from January 2007 through February 2009.

In February 2009 � the employment changes for the two series: seasonally adjusted employment estimates from the CES program (nonfarm payrolls) and LAUS employment adjusted for CES definitions, pointed in opposite directions. According to adjusted LAUS employment estimations the job growth in February was about 5,900 jobs, while the CES employment estimations show large employment declines of 28,200 jobs. As a result the difference between the monthly employment estimates in February increased to a significant level of 2.2 percent. The comparable monthly difference in January was less than half (just about 1 percent) and it became 0.7 percent for the last three years (2006 to 2008) after benchmarking the LAUS series.

Over the year (from February 2008 to February 2009) the adjusted LAUS employment estimations show a drastically more positive picture with a drop in employment of only about 23,400; while for CES estimates, the over the year employment drop is much more significant at 97,100 jobs.

� For more details about such adjustments see Current Employment and Local Area Unemployment Statistics Employment Comparisons

� Some input data (agriculture, forestry, fishing, and hunting; multiple job holders� ratio) were re-estimated at the beginning of 2009. Starting with February we use benchmarked LAUS series. The benchmarking affected the historical seasonally adjusted series back to January 2004.