For the first time in nearly six years, the number of Jackson County workers in nonfarm jobs declined compared with the same month the previous year.

For the first time in nearly six years, the number of Jackson County workers in nonfarm jobs declined compared with the same month the previous year.

The Oregon Employment Department Monday reported 83,970 people were employed on nonfarm payrolls in May, down from 84,280 in May 2007.

While the county's jobless rate dropped to 6.7 percent last month after hitting 7.0 percent in April, it was well above the 5.0 percent mark reported a year earlier.

Despite being down from a year earlier, the county's payroll employment rose by 360 jobs over April, led by seasonal gains in accommodations and food services.

But the 100 additional jobs in that sector, year-over-year, failed to counter-balance losses in construction (down 260), manufacturing (down 250) and retail trade (down 260).

"I think you can attribute a lot of that to the downturn in residential construction and all that it encompasses," said Bill Thorndike Jr., Medford Fabrication president, a Port of Portland commissioner and a co-chairman of the Portland branch of the regional Federal Reserve Bank of San Francisco.

"If anything, I can remember when we went through a cycle in housing in the past it would be much more severe than that."

External forces are playing a larger roll in shaping the job market than ever before, he said.

"Historically, housing cycles were regional and localized," Thorndike said.

"One of the differences this time is that the housing crisis is more of a national phenomenon, although certain areas such as Las Vegas, Phoenix and Los Angeles have it much more severe than we have it here on a relative basis."

It's the ripple effect from those markets that have shaken the local economy, first in the industrial sector and then in retail.

"We've received a louder echo," Thorndike said.

"Not only from the national downturn in housing but from the economic health of Southern California and Phoenix areas that a lot of our housing stock is dependent on. We've felt the updraft more than a lot of places in Oregon."

Retail trade — a major employment component — bumped up a relatively anemic 50 jobs last month compared with April, seeing little seasonal influence. That reflects consumers having less spending money in their pockets and reduced buying power.

"The high cost of fuel and transportation costs are pushing up the costs of goods," said Medford consultant John Watt of JWA.

Financial activities lost 60 jobs over the year, led in part by Washington Mutual's reduction of its business banking and mortgage staffs. Health care and social assistance continued to create jobs with 40 new positions pushing the 12-month growth to 320. Professional and business services picked up 160 jobs, while leisure and hospitality business added 130 workers over a 12-month period.

"If a person has a skill set, they can find work," Thorndike said. "If you have a commercial drivers license, you can drive a big truck. If you're an electrician or plumber, there is enough public works and commercial building out there."

Thorndike said a friend of his who runs a galvanizing plant in Portland is having difficulty finding someone to replace a retiring maintenance man.

"He is having a terrible time finding a person to keep his equipment maintained," Thorndike said. "Where you are going to see a difference from the past is people who have been hired on in the past as laborers or semi-skilled laborers. They're going to pound on a lot of doors before they get an opportunity."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.