Jackson County's jobless rate stopped just short of double digits in December as unemployment hit 9.9 percent.

Jackson County's jobless rate stopped just short of double digits in December as unemployment hit 9.9 percent.

Bad economic news snowballed as 2008 wore on, culminating with some of the worst employment reports in 25 years.

"There was a sense that the bottom fell out of the economy in Southern Oregon, and statewide, in the last quarter," Regional Economist Guy Tauer said. "The large jumps in unemployment really occurred in the last four months. With another 50,000 jobs being cut (nationwide on Monday), the trend has continued into 2009."

Jackson County's payroll count fell by 950 in December as industrial layoffs, a slow holiday retail season and even governmental employment receded. Oregon Employment Department figures show 1,640 fewer payroll jobs — a decline of 1.9 percent — in December than the final month of 2007.

While the jobless rate was a relatively small jump from November's 8.7 percent figure, it stands in stark contrast to the 5.9 percent mark in December 2007.

"If you look at published unemployment rates, you have to go back to 1984 for a similar December rate," Tauer said. "That was a deep downturn during the early 1980s — some of those months unemployment was in the 15 to 16 percent range. For people who moved here in recent years, even 10 percent seems atrocious, but we're still not at the level we saw 25 years ago when high interest rates grounded wood products to a halt."

The current malaise lies at the confluence of flagging consumer confidence, declining business investment and a dismal business outlook, while consumers are standing on the sideline.

"Falling home prices became the weapon of mass (economic) destruction," Tauer said. "Reduced household net wealth figures and the lack of consumer spending is rippling through other sectors."

Tauer said business and industry response to the national economic decline during 2008 might have a mitigating effect during the rest of the winter.

"We normally see unemployment spikes in January and February," Tauer said. "The bright side is that a lot of companies might not have done as much seasonal hiring, so maybe the spike was in November and December; that's my glass-half-full perspective on it."

The economist explained companies took a conservative tack — both in production and hiring — heading into the holidays.

"Hopefully, we won't see as much of a spike in January and February," Tauer said. "That would put us well into double-digit range. A lot of companies kept inventories lean and reduced employment levels. Some economists are thinking the rapid drop-off might look like a V-shape line and result in a quicker bounce back."

Construction employment dropped by 210, underscoring yearlong losses of 600 jobs in the field. Tauer attributed the declines to the dearth of new housing starts. He said preliminary residential building permits in Jackson County have dipped to a level not seen since about 1984 — when high interest rates hindered new construction.

Manufacturing employment fell by 100 in December and has fallen by 510 jobs over the past year. With more layoffs in the lumber and wood products industry recently announced, Tauer anticipated more job losses when January's data are reported next month.

Retail trade shed 240 jobs as the seasonal hiring ramp-up for the holiday season started to wind down. With Linens 'n Things and other retailers closing, retail trade employment ended the year down 400 jobs.

Government employment declined last month by 250, with local government and state education accounting for 230 losses.

In adjacent Josephine County, where unemployment figures were already in double figures, the jobless rate hit 11.7 percent in December. A year earlier, the rate was 7.9 percent.

Payroll employment fell by 70 jobs there in December, with small declines in a wide array of local industry sectors. The county has seen 350 jobs disappear, a decline of 1.4 percent.

Comparable data summaries are unavailable prior to 1990. However, Tauer said, last month's figures are comparable to unemployment rates back in 1985.

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