Seasonal employment upticks weren't enough to counter June's expanded work force as students and graduates looked for jobs last month.

Seasonal employment upticks weren't enough to counter June's expanded work force as students and graduates looked for jobs last month.

Jackson County's payroll employment grew by 950 in June, but the work force swelled to 103,670, leaving 6,965 people looking for jobs, according to the Oregon Employment Department. That nudged the local unemployment rate up to 6.7 percent from 6.6 percent in May.

There were nearly 2,000 more people in the county work force last month than June 2007, when the jobless rate was 5.6 percent. Compared to June 2007, Jackson County was only 80 jobs ahead last month, while neighboring Josephine County was down 300 positions.

The numbers came as no surprise to Guy Tauer, a regional economist with the Oregon Employment Department, who sees the local numbers as a reflection of the nation's stagnant economy.

"While the Rogue Valley is geographically isolated, it's not immune to outside economic struggles," Tauer said. "The broader economic forces are trickling down into the Rogue Valley economy."

Sectors such as leisure and hospitality, retail and construction that were combining to create hundreds of new jobs earlier this decade are slumping.

"Retail is treading water and about equal to what it was," Tauer said.

June construction employment rose by 130, but still trailed June 2007 by 260 paychecks. Leisure and hospitality, meanwhile, added 290 jobs in June, mostly in accommodations and food services. But over the past 12 months those firms have added just 80 positions.

There's little to indicate that those sectors, which fueled job growth in past years, are poised for a comeback. Neither are they dangling over a precipice.

"I think employers are in a wait-and-see mode," Tauer said. "I haven't heard a whole lot about recent expansions. But we haven't had a lot of huge layoffs; things are fairly quiet."

The outside influences of tight credit, foreclosures and fuel prices aren't showing signs of going away anytime soon.

"I really think we're kind of in a twilight zone when it comes to looking at the crystal ball in economic terms," Tauer said. "A lot of analysts were speculating earlier in the year that we might see a rebound in the last part of 2008 and the worst part of the credit crisis would be behind us. But the recent Indymac Bank closure and the troubles at Fannie Mae and Freddie Mac point out we're not going to see a quick turnaround in the short term."

Consumer spending, a sizable portion of the gross domestic product, declined in June. When construction was booming, consumers could pull money out of their houses to cover purchases.

"They don't have that option to go to now," Tauer said. "At the same time, the amount of credit card debt went up. It shows they are using credit cards to pay for their groceries and gas. The government can print more money and lend more out by selling notes to foreign investors. Household consumers don't have that option. When household debt is going for living expenses, that's a little more scary."

Because people don't feel so wealthy, he said, spending habits have changed as well.

"You may have tipped the hairstylist $5 before, but now $2," Tauer said. "Multiply that over thousands of transactions a day and you can see the impact that has on business and individual balance sheets."

One sector that hasn't batted an eyelash through the downturn is health care and social assistance, which added 20 jobs during the month and stands 300 jobs ahead of June 2007.

Professional and business services also rose, adding 50 jobs in June, for a gain of 110 during the past year. That's likely, Tauer said, because staffing services, as well as temporary help and employee leasing agencies, often see employment spikes during summer.

Tauer said state government employment typically climbs between May and October, with some jobs likely tied to forest fire suppression and state park maintenance associated with the summer travel season. Local and city government also increase staffs for summer recreational programs and park maintenance.

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