Seattle-Area Unemployment Dips to Previous Boom Levels

We haven’t taken a look at the jobs data in a while, so lets update those charts through June. In this series we look at how the Seattle area’s unemployment rate and approximate labor participation rate stack up to the national numbers.

Unemployment & Labor Participation

[July 24 Update – The chart above and numbers below have been updated to reflect Seattle-area participation rates using total OFM population counts for ages 15 and up. Note that the BLS population counts for labor participation are for the “civilian noninstitution” population ages 16 and up, so the national and local numbers are not perfectly comparable.]

In June the Seattle-Bellevue-Everett metro area saw the unemployment rate fall below 4 percent for the first time since April 2008. The national level of 5.3 percent was also roughly on-par with where it was at in early 2008.

The Seattle-area labor participation rate* keeps bouncing around the 68 to 69 percent range that it has been at since 2010. The national labor force participation rate continues to bump along in the same area it has been since early 2014 at around 62 percent.

For reference, in 2006 when everyone imagined the economy to be in great health, the local unemployment rate averaged 4.3% and the labor participation rate averaged 68.3%. In other words, in terms of employment and participation, the Seattle area economy is currently in comparable shape to where it was at the peak of the last boom.

Here’s a look at the local and national unemployment rates with Washington’s statewide rate thrown in as well.

Seattle-Area Unemployment Rate

Washington as a whole has the same unemployment rate as the nation at 5.3 percent.

Sources:

Seasonally adjusted series used for all data sets.

*Note: Posts in this series prior to 2015 overstated the Seattle-area labor participation rate due to an incomplete population count in my calculations. This has been corrected in the historic data above.


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
    Erik says:

    The data is starting to stack up. I’m beginning to feel a little uncomfortable. Could be a good time to sell? Nah, I stick with 2024 as the time to sell.

  2. 2
    Jonness says:

    Erik:

    We’re 6 years into the current up cycle. I think the economy will hold through the election year (2016). It’s difficult to read much further out than that.

    I’m not sure if you’re predicting we won’t have a recession until 2024 or if your just saying a long-term buy-and-hold strategy makes sense? It’s a lot easier for me to agree with the latter than the former.

    Investing tip #1: Do not get emotional when making financial decisions. Think clearly and do not let fear and greed cloud your judgment. Stick to fact-based investing, and be as informed as you can possibly be.

    Investing tip #2: A forecast is nothing more than a rough road map that helps you allocate your portfolio. Just because you forecast 2024 is a good date to sell, don’t feel obligated to see it through. You should constantly adjust your forecast as real-time events unfold. The key is to stay nimble and always work towards seeing a bigger part of the picture.

    Investing tip #3: Never make a trade just to make a trade. Always invest with a purpose.

    Investing tip #4: Market timing matters.

    And never cry over spilled milk. Learn from it and move on.

  3. 3
    Erik says:

    RE: Jonness @ 2
    I’m debating whether or not to buy some rentals in pierce county or to wait for another housing crash to buy. It would have been nice to buy in 2012, but I could only get approved for that condo.

    Thanks for the advice. It still doesn’t answer if my timing is off or not though.

  4. 4

    Real Unemployment Should Include

    Uncounted give-ups, 6 months without a job and severely underemployed….it doesn’t. Take that bogus U3 number and multiply it by 3.

  5. 5
  6. 6
    Weasel says:

    By Erik @ 3:

    RE: Jonness @ 2
    I’m debating whether or not to buy some rentals in pierce county or to wait for another housing crash to buy. It would have been nice to buy in 2012, but I could only get approved for that condo.

    Thanks for the advice. It still doesn’t answer if my timing is off or not though.

    I wouldn’t snooze on it too long. Since buying our place in Puyallup/South Hill late last year, I have seen very few comparable places come up for sale in the same price range, even less that are in range of transit options that allow for commuting in to Seattle and back every day. Pierce County just bumped our land value up 5% and the City of Puyallup is in the process of rezoning the South Hill commercial core, our street is just inside the edge of this, and may be rezoned from single family to high density. What the logic is of rezoing a nice street with 35 year old houses is I don’t know. There are plenty of other streets around that would benefit from the bulldozer.

  7. 7
    Matt the Engineer says:

    Why is our labor participation rate so low?

  8. 8
    Erik says:

    RE: Matt the Engineer @ 7
    Because less people are participating in labor. Next question.

  9. 9
    Matt the Engineer says:

    I think you have that one backward Erik. PR = percent of people employed or seeking employment.

    Why are only 55.8% of our people employed or seeking employment, compared to the national average of 62.6%?

  10. 10
    Blurtman says:

    By Matt the Engineer @ 9:

    I think you have that one backward Erik. PR = percent of people employed or seeking employment.

    Why are only 55.8% of our people employed or seeking employment, compared to the national average of 62.6%?

    6.8% are dedicated flippers and meth addicts.

  11. 11
    Blake says:

    By Blurtman @ 10:

    By Matt the Engineer @ 9:

    I think you have that one backward Erik. PR = percent of people employed or seeking employment.

    Why are only 55.8% of our people employed or seeking employment, compared to the national average of 62.6%?

    6.8% are dedicated flippers and meth addicts.

    Flippers AND Meth addicts? I would like to see that in a Venn diagram… flippers… meth addicts… how much overlap? Back in the go-go days of ’06 I’d say there were a lot of flipper meth addicts… a lot of them burned out and faded away. But not Erik!

  12. 12
    nathan118 says:

    By Erik @ 8:

    RE: Matt the Engineer @ 7
    Because less people are participating in labor. Next question.

    Why are less people participating in labor?

  13. 13
    greg says:

    By softwarengineer @ 4:

    Real Unemployment Should Include

    Uncounted give-ups, 6 months without a job and severely underemployed….it doesn’t. Take that bogus U3 number and multiply it by 3.

    I agree.

    I would also add the quality of jobs for many sectors have declined, not just in WA but across the nation. Many millions of workers have less security , and are living on stagnated wages in a country where education and health costs are running out of control.

    sure the PNW is doing pretty good , but only some people are benefiting.

  14. 14
    sytelus says:

    This is an excellent blog, some of rare content with actual data and facts. Do you happen to have following data/charts? I think it would shed lot of light on what we should expect in coming few months.

    1. Average long term occupancy rate
    2. New construction units added
    3. Gap in inventory and demand
    4. Trend in new migrants in the region

    Prices are red hot because of inventory but the question is when would new construction bring additional inventory online to start catching up the demand? That should be the turning point for the prices.

  15. 15

    By greg @ 13:

    By softwarengineer @ 4:

    Real Unemployment Should Include

    Uncounted give-ups, 6 months without a job and severely underemployed….it doesn’t. Take that bogus U3 number and multiply it by 3.

    I agree.

    I would also add the quality of jobs for many sectors have declined, not just in WA but across the nation. Many millions of workers have less security , and are living on stagnated wages in a country where education and health costs are running out of control.

    sure the PNW is doing pretty good , but only some people are benefiting.

    You guys better watch out. Keep pointing out that the employment situation isn’t that good for many people, and pfft you’ll attract pfft (reference to his attacking Jeb Bush because he didn’t recognize that the “work more hours” comment was referring to people who want and need to not be part time workers).

  16. 16
    Matt the Engineer says:

    So nobody has an answer? It was a serious question. My best guesses:
    1. More retirees in the city than throughout the country as a whole?
    2. Those unable to work because of disabilities tend toward cities because that’s where the services are?

    Looking at 1, here’s a great tool from the census. Looking at the data below, Seattle had 10.2% of its population at 65+ years old, compared to the US total of 12.4%. So #1 is definitely wrong unless we’ve had a large upswing in retirees, or unless people retire earlier here.

    I don’t know how to get at #2. Anyone?

    DATA:
    ———————————————–
    Seattle region 65+ (first data Male, second Female, using year 2000 data)
    65-69 30,461 1.26% 34,007 1.41%
    70-74 25,874 1.07% 32,819 1.36%
    75-79 22,597 0.94% 31,960 1.32%
    80-84 14,484 0.60% 22,893 0.95%
    85+ 9,720 0.40% 22,572 0.93%

    US numbers:
    65-69 4,400,362 1.56% 5,133,183 1.82%
    70-74 3,902,912 1.39% 4,954,529 1.76%
    75-79 3,044,456 1.08% 4,371,357 1.55%
    80-84 1,834,897 0.65% 3,110,470 1.11%
    85+ 1,226,998 0.44% 3,012,589 1.07%
    ———————————————–

    Oh, and here’s an interesting look on labor participation. It gets a little political, but gives a good understanding of the factors involved at the national level.

  17. 17
    Mike says:

    Wow, this house makes the 1100 sq ft home in Whittier Heights that sold for $717K look like a relative bargain.

    $400K for 560sq/ft in Crown Hill (about 17 blocks north of the other house):

    https://www.redfin.com/WA/Seattle/8729-12th-Ave-NW-98117/home/39537087

  18. 18
    Blurtman says:

    RE: Mike @ 17 – Looks like a converted potter’s shed. But you’ve gotta love being able to do laundry while seated on the throne.

  19. 19
    redmondjp says:

    By Blurtman @ 18:

    RE: Mike @ 17 – Looks like a converted potter’s shed. But you’ve gotta love being able to do laundry while seated on the throne.

    While checking Facebook . . .

  20. 20
    Rebecca says:

    RE: Matt the Engineer @ 16 – Well, based on my own experience and the circles I travel, a lot of what would otherwise be double income families with kids are choosing to have one parent at home. The cost of supporting a family in the city while relaying on : day care, transportation, food to replace what one parent can provide at home is usually a wash whereby the one extra income just pays for the cost of that parent being outside of the home. It’s not just a financial consideration of course, and a lot of gen x&y types are finding ourselves brokering an uncomfortable peace between the upwardly mobile , career driven expectations of our youth and a return to home and family centered values that also happen to make good budgeting sense. So perhaps we are bringing down “labor participation” a few points in a city where one good income can still cover the cost of a family willing to make the sacrifices to do so?

  21. 21
    The Tim says:

    By Matt the Engineer @ 7:

    Why is our labor participation rate so low?

    I figured out why. The national numbers from the BLS for population are only the population count of people 16 and over. The Washington State OFM data I was using was total population, all ages. OFM does provide data broken down by age groups, but it has a couple catches. I’m putting together something now to try to make them more comparable.

  22. 22
    The Tim says:

    I’ve updated the post with more comparable numbers for the local rate. I can’t find perfectly comparable population numbers for counties in Washington. Here are the differences:

    • National includes only civilian, WA presumably includes military
    • National includes only noninstitution, WA presumably includes the institutionalized
    • National is ages 16 and up, WA is ages 15 and up

    The first two factors would cause the local participation rate to be lower than the national rate, while the third would cause it to be higher.

  23. 23
    Mike says:

    RE: Rebecca @ 20 – That’s what we’ve been doing. However we wouldn’t have that choice if we were just now buying our house for $700K-ish. We’d have to be double income to pay that mortgage.

  24. 24
    Matt the Engineer says:

    RE: The Tim @ 21 – Excellent. Thanks Tim. That matches my expectation. I kept trying to imagine people in less urban areas working more frequently than in cities, and it just didn’t make sense. My explanation #2 felt wrong to me – there certainly doesn’t seem to be that large a percentage of our citizens disabled enough not to work.

    And Rebecca’s explanation seemed backward as well. Yes, I’ve met far more stay-at-home-mom/dads in Seattle than I knew in SF, but it can’t approach that of rural areas.

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