By DORIS HAJEWSKI and TOM DAYKIN

Wisconsin's seasonally adjusted unemployment rate for September was 8.3%, an improvement from August but a big increase when compared with September 2008, the state Department of Workforce Development said Thursday.

The rate in August was 8.8%. The September 2008 rate was 4.7%.

Eric Grosso, state labor economist, said the trend was encouraging. But he added: "We've got a ways to go for a recovery in the economy."

Wisconsin fared better than the nation as a whole, which had a September seasonally adjusted unemployment rate of 9.8%. The national rate compares to 9.7% in August and 6.2% in September 2008.

Total employment in Wisconsin was up by 5,600 jobs in September from August, but down by 124,400 compared with September 2008.

"In any downturn, it takes a while for the job market to catch up," Grosso said.

Almost every sector of the job market in Wisconsin saw losses in September. The exceptions were educational and health services, which gained on a month-to-month and year-over-year comparison. The gains in education jobs were a reflection of the start of the school year, Grosso said.

But the health care gain of 4,100 jobs compared with September 2008 is part of a non-seasonal growth trend, he said.

Leisure and hospitality logged the biggest monthly drop, losing 23,600 jobs, driven mostly by the end of the summer tourism season. Goods producing and service industries also showed big losses for the month, with each sector shedding about 10,000 jobs. Manufacturers dropped 3,900 jobs.

Department of Workforce Development Secretary Roberta Gassman noted in a statement that the state's unemployment rate has declined for four months and is now at its lowest point for the year.

Steve Waller, regional vice president for QPS Employment Group, a Brookfield-based recruiting and staffing service, said most of the improvement he's seen in hiring has been holiday related, and mostly for temporary jobs. Food, warehouse and distribution companies are hiring people now to handle the seasonal increase in volume, he said. Manufacturers have been holding back.

"I think companies are afraid to bring on permanent staff," Waller said.

In other labor news Thursday, the U.S. Labor Department said first-time claims for benefits dropped to a seasonally adjusted 514,000 from an upwardly revised 524,000 the previous week. This is the fifth decline in claims in six weeks.

The jobless claims dropped to the lowest level since January. The decline shows companies are cutting fewer workers, though the drop isn't yet steep enough to signal new hiring, economists said. And the low level of inflation is holding down prices as Americans slowly regain their appetite to shop despite rising unemployment and tight credit conditions.

The Associated Press contributed to this report.

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