State Economy Continues to Slow

According to the latest data, it looks like the state economy is slowly catching up to the unwinding national economy.

More than 3,000 jobs were lost in Washington last month, pushing the unemployment rate to 4.9 percent, up from a near record low of 4.5 percent in February, the Employment Security Department said Tuesday.

The change is statistically significant, because it lies outside of the margin of error, the state’s chief economist, Evelina Tainer, said.

Half of the jobs lost, or about 1,500, were in the Seattle region, she said. That makes sense because the Seattle region accounts for about half of the jobs in Washington.

The leisure and hospitality sector lost 1,200 jobs. Transportation, warehousing and utilities jobs declined by 700, and construction lost 500.

“We were surprised at the strength of construction in most of 2007,” Tainer said. “We are now starting to see a consistent drop.”

I don’t think that a consistent drop in construction employment should come as a surprise to anyone.

Here’s some additional commentary from the Times’ story:

…nonfarm employers shed 3,200 payroll jobs in March, the first monthly decline since September 2007; most economic sectors posted declines. And the 3,500-job gain for February that was reported last month was revised down to a more modest 1,300-job increase.

All in all, the March jobs report showed Washington’s jobs engine downshifting into first gear. But Employment Security economist Evelina Tainer said she didn’t think the state was necessarily heading into reverse.

“I think we’re going to see a few months where things are very sluggish, but I’m still not convinced we’re due for a recession in the state,” Tainer said.

Let’s not forget that official state policy appears to be “close your eyes, plug your ears, and wish your problems away,” as laid out from the top by Christine Gregoire.

(Andrea James, Seattle P-I, 04.15.2008)
(Drew DeSilver, Seattle Times, 04.15.2008)

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

9 comments:

  1. 1
    The Tim says:

    Sorry this is so late. I spent the morning down in Greenlake doing an interview with Jim Dever for an Evening Magazine segment that will air sometime during the week of April 28 – May 2.

  2. 2
    Scotsman says:

    Hmmmm, sounds like someone left the gate open and a few precious pink ponies have wandered away….

  3. 3
    Garth says:

    Our state has about the same population as Arizona, where they have lost 2000-3000 construction jobs a month since January, I don’t see much in there that directly reflects the core of the local economy as building and hospitality are bound to decline amid a national downturn.

    Tim,

    As you have been doing more interviews and talking about real estate with the media and more of the general population do you run into the hugely bullish on Seattle real estate attitude that seems so prevalent with almost everyone I talk to?

    In the comments on this blog sometimes I feel like the bubbleheads think I work in real estate, while when I talk to people other than my dad about real estate they think I am way too conservative and negative. In fact several times people have scoffed at the premise that it is possible we won’t see gains in the next couple of years, much less price declines.

  4. 4
    -------------------------------- says:

    Bennett Homes just laid off 20 more people. This is the third layoff in the last six months. So much for the spring bounce. Check out there current promotion. Looks like a desperate move if you ask me.

    http://www.bennetthomes.com/PDF/promotions/PriceGuaranteed.pdf

  5. 5
    Greg M says:

    Does anyone think we will see a decrease in construction costs? I think the labor costs for construction in this part of the country are obsencely high but am hoping they will drop prior to starting construction on my house. I’d be interested to hear what all of you think.

  6. 6
    FreedomLover says:

    Amazing what a house of cards this economy is. It literally rests on nothing.

  7. 7
    Buceri says:

    FreedomLover – when most of the economy is based on paper pushing, fees, and going shopping… it comes as no surprise..

  8. 8
    FreedomLover says:

    Buceri – it’s back to digging ditches. Honest manual labor is the way to go.

  9. 9
    TJ_98370 says:

    “This is worse than the S&L crisis. This is the first time – this is the worst credit bubble we’ve ever had in American history. No – ever in American history have people been able to buy a house with no money down, never. That’s never happened anytime in the world. So, we have the worst credit bubble. It’s going to take a long time to work its way out. You don’t cure a bubble in five or six months… It takes five or six years.”

    Jim Rogers, November 6, 2007 (Bloomberg interview with Kathleen Hays)

    James B. Rogers, Jr. (born October 19, 1942) is an American investor and financial commentator. He is co-founder, along with George Soros, of the Quantum Fund, and is a college professor, author, world traveler, economic commentator, and creator of the Rogers International Commodities Index (RICI).

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