Thursday’s report that Washington lost 1,100 jobs in August, with unemployment rising to 8.6 percent, is no surprise. The state has been bumping along since the end of the recession adding relatively small numbers of jobs, except for a short spurt in hiring during the spring.
In the second quarter, the broadest definition of unemployment showed Washington at 17 percent, vs. 15.3 percent nationally. The U-6 measures not only the “official” rate but discouraged workers and part-timers who want full-time work. Only seven states showed the same or higher broad joblessness (Oregon’s U-6 was 17.4 percent).
Nationally, gross domestic product and corporate profits have rebounded smartly from the recession. The labor market has been healing much more slowly. In July 2009, the ratio of unemployed workers to jobs was 6.7 to 1. This July it had improved to 3.5 to 1. To be sure, companies have found ways to make the same money or more with fewer people. But weak demand from the job creators — American consumers — is the biggest element holding back hiring.
Consumer demand is hurt by the big personal debt overhang, job uncertainty and stagnant wages, among other things. Many were ruined in the housing collapse. In addition, many small businesses continue to struggle with finding lending. In such an environment, it wouldn’t take much for hiring to pull back. The tipping points: recession in Europe, slowing in China and elsewhere in Asia (key markets for Washington) and continued government cuts.
Beyond this, the U-6 suggests an ongoing jobs crisis despite the go-go patina of the Puget Sound region. It should concern all state leaders.
And Don’t Miss: The two biggest myths about QE3 || Slate
Today’s Econ Haiku:
Amazon goes green
Just a big jade slab