Washington ended a year-long string of job-producing months in September. A sharp drop of 18,400 positions in the state for the month all but wiped out gains this summer and is another indication of the fragile nature of the economy two years after the official end of the Great Recession.
Those are the facts, but putting them into some context for the economy here presents some challenges. For example, new numbers this week show that the state unemployment rate dropped to 9.1 percent in September from 9.3 percent in August. The contradiction of job loss and a lower unemployment rate usually means the labor force itself has declined, i.e., more people gave up looking for a job and left the work force. That may indeed be the case, since there are more than 50,000 fewer people in the work force this September compared with September a year ago. And the unemployment rate, which counts unemployed workers, discouraged workers, and workers who have simply given up, remains at more than 18 percent for the state.
Nevertheless, no one really knows what is creating the contradition now. “It’s baffling,” said David Wallace, acting chief economist for the Employment Security Department, admitting that there are no definitive answers for why job numbers and unemployment rates continue diverge. Wallace said the two have been off almost every month this year.
"It's not unusual for the surveys to generate somewhat different results, but the gap between the two September surveys is much larger than we usually see," said Greg Weeks, director of Employment Security’s labor market and economic analysis. He expects the numbers will be revised in coming weeks.
There are also questions about the state of the economy in the greater Seattle area. One of the few sectors to show employment growth in the month was manufacturing, mostly aerospace. Boeing increased production of the 737 model to 35 airplanes a month recently, adding to employment there. Delivery of the 787 Dreamliner earlier this month also signals at least stability in that production line. And Boeing has resolved problems around the freighter version of the 747-8, another bottleneck removed.
There is also a multiplier effect with Boeing jobs. Jobs at Boeing pay well, generating jobs in the service sector. Annualized average wage in aircraft manufacturing in Washington state was $89,600 in 2009, including all occupations in the industry, not just machinists. The multiplier for Boeing is about 2.8, meaning there are 1.8 indirect jobs (grocery stores for example) for each primary Boeing job.
“The Seattle area is doing a bit better than the rest of the state as a whole,” Wallace said, “particularly post-recession.”
That sense of the Seattle economy being somewhat better off is reflected in the unemployment rate for the area, which dropped to 8.6 percent from 8.9 percent in August. And a recent survey of business and the economy, done by the Seattle Metropolitan Chamber of Commerce, also showed a somewhat more upbeat view here than elsewhere. Among the findings of the 1,700 businesses surveyed:
Small business is the engine of the economy: Businesses with six to 100 employees are the most likely to hire.
Technology leads the way: Sectors expecting to add head count include energy, aerospace and manufacturing, life sciences, information technology, and interactive media. Sectors expecting to reduce head count include government, education, and transportation.
The great disconnect: Comments from individual employers suggest stability - and even growth - but employers’ perceptions of the overall economy are weak. Of the sectors expecting growth, only some say they will hire. Many others expect higher sales or new contracts but won’t hire proportionately. This is especially true for sectors hurt badly by the decline in consumer spending in 2008 and 2009.
A quest for talent: One in four employers say they have to recruit outside the county to attract top talent.
A complex web: There is universal appreciation for the high quality of life in the four-county region, but less so than in 2010. Tangible items such as proximity to universities, networking, and transportation infrastructure have risen in importance since last year.
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