Washington's economy: Best on the coast, for what that's worth

Washington state and the Seattle area show some slowing, reflecting the national trend, but we're still the best economy on the West Coast.

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Boeing's 787

Washington state and the Seattle area show some slowing, reflecting the national trend, but we're still the best economy on the West Coast.

The next time a Boeing jet flies overhead or that little chime sounds as you open Windows 7, give Boeing and Microsoft a cheer. Without those two companies, Washington state and the Seattle area economy could be as dismal as other states on the continental West Coast.

As it stands now, the Washington economy is the best of the West, surpassing Oregon and California. Of course, that is a mixed distinction these days — all economies are dealing with the Great Recession and the likelihood of high unemployment rates lasting much longer than in previous recessions.

The state Economic and Revenue Forecast Council said earlier this month, “Washington’s economic expansion has continued to be weak. Private sector job growth remains positive but anemic and largely offset by state and local job losses. The prospects for aerospace and software are good, but housing and non-residential construction will lag.”

There was fresh evidence of a lagging economy this week in the state’s report on the employment situation — or lack of employment situation. Between October and November, the state barely grew at all, adding only 100 jobs on a seasonally adjusted basis. The unemployment rate is stuck at or above 9 percent — it was 9.2 percent in November, the same rate as November 2009. There were only 300 more people employed in November 2010 compared with November 2009.

But in Oregon, the rate is 10.6 percent for November and has been between 10.5 and 10.7 percent for the most recent 13 months. Oregon’s unemployment rate was 10.7 percent in November 2009. The state’s Governor-elect John Kitzhaber told the annual Oregon Business Summit that Oregon is headed for a fiscal catastrophe. A study commissioned by the Portland Business Alliance said Multnomah County, essentially the Portland area, ranked second from last in private-sector job creation among 194 western counties and five multicounty areas from 1997 to 2009. Per capita incomes in metro Seattle, Denver, and Minneapolis exceed those in greater Portland by 16 to 21 percent, the report said.

In our state, the Vancouver/Clark County area in Southwest Washington feels the impact of the problems in Oregon and the Portland area, just across the Columbia River. As a result, the county often has had the highest unemployment rate for the state — that was the case in November, with 13.1 percent unemployed. An estimated 60,000 Clark County residents cross the Columbia River to work in Oregon.

California’s unemployment rate was unchanged at 12.4 percent in October, according to data released by the California Employment Development Department. Nonfarm jobs in California totaled 13,857,500 in October, an increase of 39,000 jobs over the month, according to a survey of businesses that is larger and less variable statistically, the department said.

The monthly increase in jobs was a bit of good news for California, but with a work force of more than 18 million, it represents a tiny 0.2 percent gain. The year-over-year change (October 2009 to October 2010) shows a decrease of 27,400 jobs.

While Washington is doing better than other states, the numbers show that this is a recession unlike any since the end of World War II.

The November figures for our state were troubling on several levels. One was the loss of 500 jobs in the private sector, ending a five-month streak where the private sector created some jobs and gave hope that the recession’s tight grip on the jobs market was loosening. Jobs were growing, not much, but at least they were on the rise. The trend shifted in November. The public sector added 600 jobs over the month, mostly in education and health services, to account for the 100 total new jobs created.

The other troubling number was the jump in the unemployment rate to 9.1 percent in November from 8.9 percent in October for the Seattle-Bellevue-Everett area, home to those two big companies with the jobs. A trend is not made from one month, but the increase shows the metro area has few other sectors that are growing.

The number of unemployed people also increased to 134,500 from 133,400 in October. First-time claims for unemployment insurance were also on the rise. A four-week moving average — it helps even out the swings in the data — had dropped to about 9,600 in September but the average was back to more than 15,000 in early December.

Snohomish County saw its unemployment rate hit double digits again at 10 percent, up from 9.9 in October. The Tacoma/Pierce County area was at 9 percent, up from 8.7 percent in October.

“Job growth is in a holding pattern,” said Employment Security Commissioner Paul Trause in a statement. “It underscores why unemployed workers are having a hard time finding jobs and why we need to extend federal emergency unemployment benefits for awhile longer.”

Industries that added jobs last month included education and health services, up 800; professional and business services, up 700; government, up 600; manufacturing, up 600; leisure and hospitality, up 600; and wholesale trade, up 400.  Not counting higher education, state government lost 200 jobs.

Jobs were lost in construction, down 2,100; financial activities, down 500; information, down 400; transportation, warehousing and utilities, down 300; and other services, down 300.

The Employment Security Department estimates 322,703 people (not seasonally adjusted) in Washington were unemployed and looking for work, and 240,201 people received unemployment benefits from Washington in November.

A national survey of the working population gives another picture of the depth of the recession and the nature of the jobless recovery.

The Bureau of Labor Statistics reported earlier this month a total of 153.9 million persons worked at some point during 2009. The proportion of workers who worked full time, year round in 2009 was 64 percent, down from 65.6 percent in 2008. The number of persons who experienced some unemployment during 2009 increased by 4.9 million to 26.1 million. The sharp increase reflects the continuing weak labor market conditions experienced throughout 2009, according to the BLS.

Nationally the unemployment rate edged up to 9.8 percent in November and nonfarm payroll employment was little changed. Temporary help services and health care continued to add jobs over the month, while employment fell in retail trade.

The BLS perhaps inadvertently summed up the current economy in their monthly unemployment report: “Employment in most major industries changed little,” the BLS said.

We were looking for a bit of good cheer on the economy in this holiday season. Instead, we’re still stuck.


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About the Authors & Contributors

Stephen H. Dunphy

Stephen H. Dunphy

Stephen H. Dunphy writes on business and economic issues for Crosscut. He was a business editor and columnist for a number of years at The Seattle Times.