Washington Job Market Still Growing Slowly

Here’s the latest on the state economy. Everything’s coming up roses, it would seem.

Washington continued to defy the multiple drags on the U.S. economy in February, as state payrolls added 3,500 jobs and the unemployment rate held steady at 4.5 percent.

“We’re really different from the national economy at this point,” said Evelina Tainer, the state’s chief labor economist.

Few sectors illustrate that difference better than construction. Overall, the nation has lost 222,100 construction jobs over the past 12 months, as the collapsed boom in housing idled thousands of carpenters, roofers and drywallers.

But in Washington, construction continued to add jobs — 400 last month, and 1,600 since February 2007. Weakness in residential construction has been outweighed by robust nonresidential construction activity — office buildings, malls, factories and the like.

Much of the growth in construction jobs last month occurred in Eastern Washington, Tainer said. Two large projects, the nuclear-waste vitrification facility at Hanford and the expansion of a polysilicon plant near Moses Lake, together are employing hundreds of workers.

Job growth in Washington has been decelerating for several months; the average growth rate in 2007 was 2.5 percent. In the four-county Puget Sound region, year-over-year job growth in February was 2.1 percent, down from an average 2.8 percent last year.

Still, said Tainer, “Slow good news is better than bad news.”

Indeed. I don’t wish for our state to start shedding jobs, but it should be noted that despite the common myth to the contrary, overall job growth has little to no relation to home price increases or decreases.

We’ve covered this subject pretty thoroughly here before, and a present-day example can be seen down in San Diego, where employment is still growing (slowly), but prices are down nearly 20% from their peak as of December. Granted, if a local economy is in bad shape, it can definitely be reflected in an exceedingly crappy housing market (see Detroit), but the converse is clearly not always true.

(Drew DeSilver, Seattle Times, 03.19.2008)


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

24 comments:

  1. 1
    Sniglet says:

    I too don’t wish to see our state lose jobs, but I think that inevitability is fast approaching as the global credit crunch picks up steam. As fewer and fewer individuals and companies are able to get cheap credit, demand will fall (around the world), and Seattle area employers will certainly feel the impact (just as every other company in the world will).

    I fear the local employment news will be very different this time next year.

  2. 2

    “overall job growth has little to no relation to home price increases or decreases.”

    I know we’ve been through this before, but….aren’t those places which saw the biggest run up in prices in the last few years also places that saw healthy job growth? Not saying places with healthy job growth are better places to buy at any given time, but is it possible that they are more volatile than cities with less healthy job growth?

    Seems to me that places with crappy economies didn’t see the big run up in home prices, and might actually be better investments right now: Maybe not Detroit, but smaller less dangerous cities with no economy?

  3. 3
    rose-colored-coolaid says:

    #2

    I know we’ve been through this before, but….aren’t those places which saw the biggest run up in prices in the last few years also places that saw healthy job growth? Not saying places with healthy job growth are better places to buy at any given time, but is it possible that they are more volatile than cities with less healthy job growth?

    Not so much. Many of the areas with lowest unemployment did not participate in the boom.

    Two comments on this topic. First, growth in construction jobs is touted as a positive. I really don’t see it that way. A lot of those jobs are going away, and we are barely growing as an economy with them. Once the tide goes back out, they will be a major drag. I would be much more excited to hear WA added 3000 jobs last month even though 500 construction jobs were lost.

    Second, Seattle is probably the mainland city with the most at stake in Asia. China is starting to look at some very difficult times. They have industrialized more quickly than any country in history, and it is starting to bite them. I think this will drag on Seattle’s economy significantly, but it probably won’t be felt for another couple months (or maybe not until after the Olympics).

    http://articles.moneycentral.msn.com/Investing/JubaksJournal/ChinasLoomingOlympicsDisaster.aspx

  4. 4

    I’M NOT A FAN OF ANY STATISTICAL DATA SOURCES SHOWING JOB GROWTH, ESPECIALLY FOR OUR LOCAL SEATTLE ECONOMY

    Here’s some written data on fairly recent employment losses in the Seattle area I just pulled:

    “…2000 536,471 1,188,577 1,748,793
    2005 490,695 1,133,311 1,727,080
    *King, Snohomish, Pierce and Kitsap Counties.
    Source: Puget Sound Regional Council…”

    This documents the greater Seattle area lost about 20,000 jobs since 2000 through 2005.

    See the proof:

    http://www.cityofseattle.net/oir/datasheet/Datasheet2007.pdf

  5. 5
    FreedomLover says:

    softwareengineer – I agree, the employment figures tell a lot more then unemployment figures which are dubious at best. I think if you’re a hitech worker, things are pretty good right now. Not so much for construction and union jobs.

  6. 6
    Cougar says:

    Report: Seattle one of nation’s fastest-growing VC areas
    http://www.bizjournals.com/seattle/stories/2008/03/17/daily13.html

    “Seattle is one of the nation’s fastest-growing venture capital investment areas over the past 10 years, according to a recent report. Seattle benefits from a strong bench of local venture capital firms that have embedded themselves in the startup community. It does not rely on a single industry to carry investments. Rather, it is very diverse, investing in both traditional venture capital areas as well as cutting edge investment sectors such as biotechnology and clean technology,” according to the report.

    Underground there is a lot of wealth that continues to feed the Seattle area that is not as prominent in the headlines.

  7. 7
    Marc says:

    Irony is saying: “I’M NOT A FAN OF ANY STATISTICAL DATA SOURCES SHOWING JOB GROWTH, ESPECIALLY FOR OUR LOCAL SEATTLE ECONOMY” and then saying “Here’s some written data on fairly recent employment losses in the Seattle area I just pulled:”

  8. 8
    Jeff says:

    Actually, irony is more like someone with an advanced degree incorrectly using the word ‘irony’.

  9. 9

    INTERESTING BLOG COUGAR

    I agree with you. I pulled a government economic report a week ago, its on this Bubble Brain blog, somewhere….lol, to sum it up, MSFT was adding 2% to the household wage increases in stock options, making them in error.

    Of course this doesn’t help Seattle real estate at all, if its all in a handful of billionaire’s pockets. It sure spikes household income increases averages in error like the report stated….lol

    2% is about half the yearly wage increases on Tim’ s charts too.

    When they do average household income figures in Seattle; they should eliminate the top 1-10% incomes…..the results would horrify RE folks….lol

  10. 10
    Marc says:

    Do I stand corrected? My version of Webster’s third definition of irony is “a combination of circumstances or a result that is the opposite of what is or might be expected or considered appropriate.”

    To critique data because it is unfavorable to one’s opinion only to immediately refer to other data that is favorable but no more credible struck me as ironic. You’re comment to my comment struck me as funny as heck, so touche.

    Funny as heck? Simile or metaphor?

  11. 11
    Alan says:

    Funny as heck? Simile or metaphor?

    Or irony?

  12. 12
    NotaBull says:

    I saw a statistic recently that put WA at the top of all states in terms of the percentage of gross state product produced by exports. I think we were 18%. I don’t know if it’s paper, wood, fish, software, or some combination of the above.

    Regardless, as the dollar sinks our exports grow. Ex-petroleum exports have consistently grown and I think will keep going this way, and this benefits WA more than other states. So, as the country as a whole enters a nasty recession, it is *possible* that WA could actually not be in recession, or could be in a mild recession due to the excessive contribution of exports in our state’s economy. In every recession there are industries or areas that are affected more and less than others. The GDP figure is an average across all states, after all. In most averages there is someone that’s screwed, someone that’s fine, and someone in the middle.

    Personally, I believe that the country is in the beginning of a bad recession, and that WA will experience a mild recession overall, with some areas being hit particularly hard: construction, construction materials, auto sales, luxury retail and restaurants. It’s my belief that WA’s export strength will help it avoid a bad recession.

    Time will tell.

  13. 13
    rose-colored-coolaid says:

    #12 Did that report differentiate between exports to other countries and exports to other states?

    If that 18% includes other states, you can bet a significant amount of it will hinge on consumer spending in the recessing USA. If not, then it’s probably a good sign for the local economy.

  14. 14
    Marc says:

    Perhaps an exigous attempt at humor?

  15. 15
    redmondjp says:

    NotaBull,

    Just curious, what do you see at our state’s exports (serious question)?

    Boeing airplanes – check (well, can’t really count the 787 as many parts are from other countries and we will only be doing final assembly here).

    Microsoft software – check.

    Medical electronic devices made locally – check.

    I’m sure that there are many others. But let’s consider some other andecotal evidence:

    My mom & dad both own timber property, so I know that timber prices are really low now.

    I go to the grocery store and buy Tree-Top (headquarters in eastern WA) apple juice, and it says “Concentrate from China” on the bottle–so we’re IMPORTING apple juice concentrate from 1/2-way around the world when we are growing apples here. Hmmm . . .

    So I’m curious about what exports from here you think will help us not get hit as bad as other parts of the country.

  16. 16
    Marc says:

    Exiguous, that is.

  17. 17
    FreedomLover says:

    redmondjp:

    Too many facts and not enough emotion.

  18. 18
    NotaBull says:

    “#12 Did that report differentiate between exports to other countries and exports to other states?”

    It was exports out of the country.

    “So I’m curious about what exports from here you think will help us not get hit as bad as other parts of the country.”

    I already said I don’t know the exact mix of exports. All I *do* know, for a fact (according to the article), is that as far as states go, WA rates the top in terms of % gross state product coming from exports. So we’re obviously exporting a lot of stuff relative to the US. And if exports for the *whole* US are going up (another fact) then our share of the dollar-peso bounty will be disproportionately higher than in other states.

    Anecdotal evidence is great and we can pull anecdotes out of our ass all day, especially if we’re talking timber which is probably mostly non-export and used for US construction. i.e. in trouble. I do, however, prefer a more data driven approach.

    Perhaps if the The Tim has The Time he can look into this export “bounty” more. If so, I’ll try and find the article I read with these stats in it…

  19. 19
    NotaBull says:

    http://www.bizjournals.com/seattle/stories/2008/02/25/daily16.html

    “Washington exported 38 percent more agricultural products in 2007 compared with 2006, as state officials said agricultural exports exceeded $9.3 billion last year.”

    http://wenatcheeworld.com/apps/pbcs.dll/article?AID=/20080310/BIZ01/593815753

    “WENATCHEE — Washington state apple exports have stayed relatively constant in volume in the last couple of years but have increased more than 20 percent a year in value because of higher prices, says an official of the Washington Apple Commission.”

    “Higher prices would tend to depress sales but haven’t because a weaker U.S. dollar increases the buying power of other countries, Baerveldt said.”

    A quick Google news search for “washington state export apples” finds some useful information on apple exports.

    I’m not saying that the apple industry is going to save WA from recession, just that the weaker dollar will help states with higher rates of export industry (like WA).

  20. 20
    deejayoh says:

    not that it has anything to do with housing, but I am reasonably certain that Boeing is – year in and year out – the largest exporter in the country. They can swing the balance of trade with a couple planes.

  21. 21
    FreedomLover says:

    We are def very lucky to have Boeing and Microsoft.

  22. 22
    Garth says:

    Logs, wheat, apples, seafood, airplanes, finished forest products and software are Washington’s major exports I believe.

    The weakened dollar should help sales for these items.

    Here is some data on soaring agricultural exports in Washington for last year.

    http://www.bizjournals.com/seattle/stories/2008/02/25/daily16.html?ana=from_rss

  23. 23
    jon says:

    From softwareengineer’s link:

    Top 10 Exports by Industry Sector
    Based on 2006 exports originated in Washington State,
    in billions of U.S. dollars*
    1. Aircraft, Spacecraft and Parts……………. $32.90
    2. Industrial Machinery, Including Computers…. 2.39
    3. Cereals………………………………………………. 2.30
    4. Electric Machinery, Sound Equip.,
    TV Equip., Parts…………………………………… 1.71
    5. Oil Seeds, etc., Misc. Grain, Seed Fruit….. 1.70
    6. Optic, Photo etc., Medical or Surgical…….. 1.43
    7. Mineral Fuel and Oil…………………………….. 1.26
    8. Wood and Articles of Wood…………………… 0.80
    9. Vehicles, except Railway or
    Tramway, and Parts, etc……………………….. 0.76
    10.Paper and Paperboard………………………… 0.74
    TOTAL ALL INDUSTRIES……………………. 53.075

    So basically, it’s airplanes.

  24. 24
    NotaBull says:

    http://www.cted.wa.gov/site/122/default.aspx

    Here are the stats for the state. Airplanes are still WAY up there, but something should be noted:

    “WISER statistics represent the value of exported products that originated in the state of Washington. Services, including software and architectural and engineering design, are not included in the data.”

    I imagine that most of what Microsoft provides is a product and not a service, but I’m not sure to be honest.

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