Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
June 24, 2013 at 10:39 AM
Washington isn’t past the jobs crisis yet
The unemployment rate for the Seattle-Bellevue-Everett metropolitan area fell to 4.7 percent in May from 7.3 percent a year earlier, continuing the good news on the jobs front that began with data showing that King County’s jobless rate fell to 4.4 percent in April. But this must be tempered with the bigger picture and questions about the road ahead.
Washington gained 4,100 jobs in May and the unemployment rate fell to a preliminary seasonally adjusted 6.8 percent. A big help came from increased hiring in the public sector. Over the past year, the private sector added 59,500 jobs but the public sector gained only 1,300 jobs. In May, government accounted for 3,200 of the net new jobs. The labor force is also larger: Statewide 3.49 million people were working in May, 5,200 more than a year ago. In metro Seattle, the increase was 24,400. This is a good sign in an economy that has been plagued by low labor-force participation due to lack of jobs.
On the other hand, five industries added employment in May while eight contracted, including manufacturing. That doesn’t necessarily mean a trend. Most jobs are being added in lower-paying sectors. That’s a phenomenon seen nationwide. It’s too early to assume the Seattle boom will translate into strong employment growth statewide.
The most recent county data, for April, showed Pierce County with 8.1 percent unemployment and many other areas still ailing. In addition, in the first quarter Washington’s U-6 unemployment rate stood at 16.4 percent and Oregon at 17.2 percent, two of the worst in the nation. U-6 is the widest measure of joblessness, including part-timers who want full-time jobs and so-called discouraged workers who are not actively searching for jobs. This will make the data on the second quarter, coming in July, all the more important. Watch the trend: Will county and metro employment across the state show several months of improvement through the summer and fall?
Headwinds are coming. Some tapering off of jobs is happening at Boeing, which was a stalwart during the downturn. The stock market is in turmoil and yields are rising on Treasuries due to the Federal Reserve’s intention to back off bond buying and economic trouble in China, especially in its banking sector. If this lasts long, it will invariably affect hiring.
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Today’s Econ Haiku:
Begins a course correction
Bull market chopper