Local Unemployment Nearly on Par with National Rate

Washington State’s latest unemployment statistics came out yesterday, and King County came in with a staggering 8.0% unemployment rate.

To put this in context, I created the following graph, which charts local unemployment back to 1990 (as far as I can locate data), and compares it to the nationwide unemployment rate as well as “official” recessions as measured by the National Bureau of Economic Research.

National and King County Unemployment

Note that these measures are from the U3 series, which is based on a relatively narrow definition of unemployed persons. The nationwide U6 unemployment rate came in at 16.0% for February. Unfortunately the broad U6 measure does not appear to be available for King County. Hit Wikipedia for more information on the different measures of unemployment.

King County’s rapid increase in unemployment tracks pretty closely to the growth in the nationwide rate, virtually erasing the gap that had grown between the two through 2006 and 2007. With a 1.3-point increase over January, King County’s unemployment rate rose over three times faster than the nationwide rate month-to-month in February. If this rate of growth were to continue, King County unemployment will fully catch up to the nationwide rate this month.

It is also worth noting that the latest unemployment rate for King County absolutely blasted past the peaks that were reached following each of the previous two recessions (6.6% and 6.8%). If past performance is any indication of where we are headed this time, we could easily end up seeing 15% unemployment here in King County before things start to improve.

I hope I’m wrong, but unfortunately there is nothing in the statistics to currently point toward a more optimistic outlook.

Sources:
Recessions: National Bureau of Economic Research
National Unemployment: Bureau of Labor Statistics
Local Unemployment: Washington State Employment Security Department

  

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.

25 comments:

  1. 1
    Ray Pepper says:

    Optimism? You don’t need to look any further then todays NEWS:

    Fed to purchase up to 300 Billion of Longer-Term Treasury Securities over next 6 months!!

    Now that is Bullish!!

    Money going directly where there funds are needed and should stabilize the patient.

    “The Fed will employ all available tools to promote economic recovery and to preserve price stability”

    Just a HUGE HUGE DAY!

    Rate this comment: Thumb up 0

  2. 2
    Kary L. Krismer says:

    I wonder how much of this is due to small/medium size businesses either not being able to get loans, or being concerned they won’t be able to in the future?

    Rate this comment: Thumb up 0

  3. 3
    Ray Pepper says:

    The FED could care less about inflation now. As I like to say at the Muckleshoot Poker Room:

    “I’m all in”

    The Fed is saying the same.

    Rate this comment: Thumb up 0

  4. 4
    Scotsman says:

    My god, look at the slope of those curves- unprecedented and seemingly abating.

    “To infinity- and beyond!!”

    Rate this comment: Thumb up 0

  5. 5
    Scotsman says:

    Um, make that “unabating”. What happened to my edit function?

    Rate this comment: Thumb up 0

  6. 6
    deejayoh says:

    I think the only potential glimmer of hope is that unemployment is a lagging indicator of economic activity. Usually by the time it peaks the economy is already back in growth mode. As an indicator of future potential it has very little predictive value.

    Rate this comment: Thumb up 0

  7. 7
    Ray Pepper says:

    RE: deejayoh @ 6
    100% correct!

    Rate this comment: Thumb up 0

  8. 8
    jon says:

    Financing the federal deficit by paying for it with newly printed money. What could go wrong?

    Rate this comment: Thumb up 0

  9. 9
    jon says:

    Sniglet must be busy recording a new podcast explaining how the dollar plunging against all other currencies is deflationary.

    Rate this comment: Thumb up 0

  10. 10
    Scotsman says:

    Sorry guys, but $300 billion is a drop in the bucket up against already guaranteed trillion dollar deficits and the additional trillions of planned federal programs that haven’t been finalized yet. Oh, and lets add in the tens of trillions of lost wealth over the last year or so. This might take the S+P to 850 and the Dow to 9000, but then it’s all down hill again. We’re seeing the last desperate efforts to save a sinking ship, the expected solid mid plunge rally one expects in a bear market. But we haven’t seen a single fundamental change in the economy as a whole. This rally will be carried by the coming change in mark-to-market accounting requirements (April?) but by early summer it’s off to the bottom again. The people are being played by the politicians and their banker friends.

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  11. 11
    SeattleMoose says:

    Well, the commute has noticeably improved…..

    Rate this comment: Thumb up 0

  12. 12
    Kary L. Krismer says:

    RE: SeattleMoose @ 11 – After we build all those roads with the stimulus money it will be even better! By then there just might not be anyone who can afford to drive on them.

    Rate this comment: Thumb up 0

  13. 13
    jon says:

    In addition to the $300B in treasury bills, the Fed is also pumping $850B into mortgage backed securities and Freddie/Fannie debt. That’s enough money being freed up to pay about $200K for every house now for sale on the market. I’d say that is a pretty big change in the economy.

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  14. 14
    S-Crow says:

    Mortgage Interest rates will probably fall (improve) very soon due to the massive MBS purchases announced today.

    Rate this comment: Thumb up 0

  15. 15
    Objectivity says:

    WHAT A JOKE!!!

    STOP PRINTING MONEY TO ARTICIALLY INFLATE PRICES!!!! WE WILL NEVER RECOVER UNTIL WE TRULY HIT BOTTOM.

    Crap like this will only prolong the pain.

    Rate this comment: Thumb up 0

  16. 16
    Ray Pepper says:

    RE: S-Crow @ 14

    “Probably”—try “WILL FALL” but will the people see it or will it line the pockets of the Mtg Reps?

    Rate this comment: Thumb up 0

  17. 17
    dancingeek says:

    If past performance is any indication of where we are headed this time, we could easily end up seeing 15% unemployment here in King County before things start to improve.

    The Tim, what is this 15% projection based upon? Are you talking about the U6 number (unlikely since it’s unknown) or the U3 number? U3 hitting 15% sounds pretty dire…

    Rate this comment: Thumb up 0

  18. 18
    Objectivity says:

    Great Ray-

    Now more people can qualify for loans on over-priced homes, and lose their shirts when the house of cards eventually falls.

    Rate this comment: Thumb up 0

  19. 19
    WestSideBilly says:

    RE: dancingeek @ 17 – He meant the U3 number. U6 is already over 15%, probably closer to 20% in King County.

    Rate this comment: Thumb up 0

  20. 20
    Ray Pepper says:

    RE: Objectivity @ 18RE: Objectivity @ 18

    dont shoot the messenger. I agree. Much of this will delay the inevitable……..All this crap still has to go back to the banks..either this year, next, or thereafter.

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  21. 21
    Scotsman says:

    Sorry, Ray, but I think it’s all going back to your savings/wallet, not the banks. Unless you don’t pay taxes.

    Rate this comment: Thumb up 0

  22. 22
    Ray Pepper says:

    RE: Scotsman @ 21

    Please explain?

    Rate this comment: Thumb up 0

  23. 23
    Mikal says:

    RE: dancingeek @ 17 – If dollars are being dumped into the system then it will artificially make house values remain constant or increase due to inflation. Correct? There were a number of people here claiming that the fed would not do this. Yet Bernanke on 60 minutes claimed to be doing exactly that.

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  24. 24

    […] With that in mind, the additional $750 Billion in stimulus is meant to drop the rates to such attractive levels that it will encourage home sales and refinance activity. The sales going forward will theoretically place a building block or foundation for holding values at a point that will at least slow or level off further declines. This is a positive development for those both refinancing and for sellers, if it can take root. Whether or not it will take root remains to be seen due to many other factors. […]

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  25. 25
    Herman says:

    Inflation protected bonds jumped in value by 5% today.

    Rate this comment: Thumb up 0

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