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Jobs Report: Businesses Continue Adding to Payrolls

OLYMPIA, WA-Despite its monthly household survey showing a two-tenth rise in the unemployment rate, Washington employers continued to add jobs in May, according to the Washington State Employment Security Department.

By Brian K. Miller | Updated on June 15, 2005

OLYMPIA, WA-Businesses in the state continued to add jobs in May, according to the state employment security department. On a seasonally adjusted basis, nonfarm payroll grew by 3,200 employees last month, following a similar gain in April, according to the agency.Meanwhile, the seasonally adjusted unemployment rate rose by two tenths of a percentage point to 5.7% following a rise in April of three-tenths of a percentage point. The agency’s chief economist Rick Kaglic tells GlobeSt.com that when a seeming dichotomy such as this occurs, one should focus on the more reliable number, which is the payroll employment data. The payroll data is based on a survey of 8,000 businesses, he says. The unemployment data is based on a survey of a relatively paltry 1,350 households. Moreover, the businesses provide hard data, whereas household survey participants are simply asked if they are employed and, if not, whether or not they are looking for work at that particular time.”What you should take from this (monthly report) is that we continue to see fairly steady payroll employment growth,” he says. “It is much easier for individuals to enter or exit the labor force than it is for a business to hire or fire a worker, which makes the business data less volatile.”In further explaining the situation, Kaglic says the better indicator of general business activity is business demand for workers as represented in the payroll employment numbers because the household survey simply represents the labor supply’s response to that demand. “This is why it is not unusual, nor necessarily unhealthy, for the unemployment rate to rise at the same time as payroll employment is increasing,” he says. “As more firms announce hiring, more workers will respond by applying for those jobs.”

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