Oregon jobless rate keeps climbing.

Byline: Christian Wihtol The Register-Guard

Underscoring the state's continued economic woes, the jobless rate hit 8.5 percent in June, the highest rate in nearly 17 years, the Oregon Employment Department said on Friday.

The growth in the labor force - due in part to high school and college graduates entering the job market - outpaced the number of available jobs, the state said.

The state's jobless rate has not reached 8.5 percent since June and July in 1986, when the state was inching its way out of a long recession.

The state's labor force - the tally of workers and those actively seeking work - reached 1.87 million in June, its highest ever, with 159,000 of those people unemployed.

Oregon's jobless rate was well above the national rate of 6.4 percent for June, but both the state and national rates increased at a similar pace that month. Oregon's unemployment in May was 8.2 percent, while the national rate was 6.1 percent.

``It's just proof that Oregon's economy has not stabilized yet,'' said state employment economist Art Ayre. ``At least we saw a few months of (job) gains. But we're not out of the woods yet.''

In Lane County, the jobless rate for May was 7.5 percent. June's rate will be released next week.

The jobless rate in Oregon has risen for four straight months, from a low of 7.3 percent in February.

In June, the statewide work force grew very rapidly, by 44,600 people, the state said.

Ayre said that quick pace may be partly due to the children of baby boomers now beginning to enter the work force. These youngsters are ages 15 to 20, Ayre said. "Individuals in this group are likely to look for summer work, or to be graduating," he said.

Also, older workers who decided a year or two ago amid the state's economic slump to go to school for training may now be graduating, Ayre said.

There weren't many big unexpected layoffs in June, he said.

Total nonfarm payroll employment was typical of June, with 9,700 jobs added, the state said. Four major industries - construction, manufacturing, professional and business, and leisure and hospitality - added about 3,000 jobs, normal for this time of year.

Educational and health services dropped 4,400 jobs in June, near normal for the start of summer vacation, while government jobs declined by 1,400.

June's payroll employment data continue to show a divergence between job trends for the private sector and government.

Private sector employment has held relatively steady for the past year and a half, while government employment has dropped sharply since the start of the year.

The Associated Press contributed to this report.