Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
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October 22, 2013 at 10:28 AM
The government’s report on September employment came out today, delayed by the shutdown. Although late, it is valuable because it gives us the last snapshot of the economy before the costly effects of House Republicans closing the government and playing chicken with national default. In other words, jobs reports for the rest of the year will not be better and are likely to be far worse.
The 148,000 net new jobs created were little more than the 125,000 or so needed to keep up with the natural growth of the labor force. Not only that, but the third quarter saw a significant deceleration in job creation. In the first quarter, payrolls rose an average 207,000 per month, including 211,000 in the private sector (government austerity continued to hurt the public sector). That slowed to an average 182,000 in the second quarter.
With September’s data, the third quarter shows the monthly average at 143,000. Not only that, but private-sector hiring dropped to an average 129,000.
September 19, 2013 at 9:58 AM
We shouldn’t be too complacent about the rise in Seattle unemployment to 5.2 percent in August from 4.8 percent the month before. True, one month does not a trend make and there’s always “noise” in data. But, as the Seattle Times’ Amy Martinez reported, the metro area’s joblessness hasn’t risen four-tenths of a percentage point in a single month since the worst of the recession. Also, a big part of the 4,300 jobs lost last month came in well-paying manufacturing positions, specifically in aerospace. Boeing has warned that it is trimming payrolls here. We can expect to feel that effect in the months ahead.
Seattle has been one of the few encouraging spots outside the Oil Patch in this dismal labor market. At a 4.8 percent rate, we had reached what economists would consider full employment. Now, at least with the latest numbers, there’s cause for concern and it goes beyond the aerospace sector. The 1,500 positions cut in leisure and hospitality at the height of the tourist season also raise a question mark. Wider headwinds also continue from the federal sequester and now, apparently, another hostage situation over the debt ceiling. Aside from the statistical anomaly of teachers returning to work, government cutbacks at all levels have held back recovery. And, as Martinez pointed out, job creation has not improved enough to accommodate the growth in the labor market. Finally, the housing engine is not coming back with the strength it had in the 2000s.
This is not to say Seattle is looking at a double-dip — unless the House of Representatives forces a default on federal debt, and then all bets are off. But at the least, the August report is a reminder that we’re not a nation-state, that even with a diversified and strong local economy we’re still facing the general unemployment crisis that dogs America, years into this so-called recovery.
And Don’t Miss: Why the JPMorgan settlement falls short | The New Yorker
Today’s Econ Haiku:
Full faith and credit
Doesn’t seem to mean that much
To a House of Cards
September 9, 2013 at 10:35 AM
Friday’s jobs report was bad. Forget the unemployment rate falling to 7.3 percent in August from 7.4 percent in July. That was mostly the result of 312,000 people dropping out of the labor force. Labor force participation is its lowest since 1978, and while economists are divided on why it is happening — baby boomers retiring, people going on disability or staying in school, discourged workers who have stopped looking for a job — it is almost certainly not a healthy sign. There aren’t enough job openings. Most boomers are horribly prepared for retirement. This is a metric that almost certainly points to a lack of good jobs and slower growth.
The 169,000 jobs added must be measured against the 125,000 or so needed just to keep up with the natural growth in the labor force. Net new job growth has slowed since earlier in the year. Slipped into Friday’s report were revisions cutting the number of jobs added in June and July. Government jobs overall continue to be slashed, a stark contrast to other recoveries and a huge headwind for this one. Most jobs are being created in low-wage sectors. Part-time work is rising (and no, not mostly because of Obamacare).
The “jobs gap,” what is needed to get us back to 2008 employment levels, continues to be disastrous. See for yourself in the Hamilton Project’s calculator. There’s no end in sight to the jobs crisis.