Seattle Sees Job Growth, But Not in Real Estate Sectors

It’s been a while since we had a look at local job growth data, and now is as good a time as any to take a look at the latest data.

First up, year-over-year job growth, broken down into a few relevant sectors:

Seattle-Area YOY Job Gains / Losses

Finance, real estate, and construction are all still shedding jobs, while overall employment has been making gains since October. Retail has been doing especially well, first turning postive back in May 2010.

Here’s a look at the overall Seattle area unemployment rate compared to the national rate:

Seattle-Area Unemployment Rate

Still more or less tracking the high national rate of unemployment here in Seattle, despite the recession having officially ended over two years ago now.

Meanwhile, the total number of jobs nationwide still sits five percent lower than it was at the peak, as this jobs recession drags out far longer than any other post-WWII recession. At this rate, it will probably be another two or three years before we get back all the jobs lost since 2007.

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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.

20 comments:

  1. 1
    Bingo says:

    Thanx Tim. This helps put things into perspective. An argument can be made that the near tripling of the unemployment rate was due to the complete implosion of the REIC (Real Estate Industrial Complex). A ton of high paying jobs in the REIC have disappeared. The days of Realtors and Mortgage brokers closing 10+ deals a month making $20,000/mo are gone, never to return. Home builders making 20% returns… gone. Escrow & Title firms severely impacted. Those previously benefiting from those high paying jobs, restaurants, malls, car dealers have also taken a hit.

    The bigger issue is what would it take to take for unemployment to reach 15% to 20%? I’ve been trying to figure out if there are other industry-wide implosions in the making. Sure, the Costcos, Nordstroms, Barrier Motors, Starbucks, Boeings, of the world may have to trim around the edges, but they are not going away. All I could come up with is “Government”. Even then, I can’t imagine Gov’t imploding. Example…In my school district, the teachers are fighting over getting a 1.9% pay increase. No layoffs proposed. They may or may not get their raise, but we still need school teachers, firemen and police, etc. I saw where Seattle “saved” money by not hiring an Exec position they had budgeted, but not hired. Cutbacks are certainly required, but Gov’t is not going to “implode”.

    If the implosion of the REIC tripled the unemployment rate and caused home prices to drop near 30% from the peak, wouldn’t it take something similar to cause another 20% drop in home prices?

  2. 2
    Scotsman says:

    “Retail has been doing especially well, first turning positive back in May 2010.”

    Great news! Sure, they don’t pay very well, but it’s a start. And I remember back not that long ago when the retail crowd- baristas, 7-11 clerks, greeters at Wallmart, all those guys could buy $500k homes on stated income loans with teaser rates. Now that their jobs have returned I’m sure they’ll be jumping back into the housing market. This could well mark the bottom. Those looking for rentals should also be hitting the streets, hunting “gems.”

    What?? Yes dear. Sorry guys, my wife just told to to get off the computer and go to my room. No respect. No sense of humor either. . . ;-)

  3. 3
    deejayoh says:

    Looks to me that Manufacturing sector has had the biggest turn-around. The purple line is hidden behind all the others, but it has swung most dramatically from job losses to job gains in the shortes period of time – more so than retail

  4. 4
    David Losh says:

    RE: Bingo @ 1

    No, home prices are a part of Real Estate which was an asset. Today people are paying on mortgages for property that is going down in value as an over all cost of living.

  5. 5
    ray pepper says:

    Oh the Humanity! My 93 year old neighbor Sid, across the street, just took the easy way out and died in his sleep two nights ago………………..He won’t have to live through this nor will he suffer any losses from the Zillow IPO..From 60.00 to 27.00 and dropping faster then housing prices did in Vegas!

    What a trainwreck: http://finance.yahoo.com/echarts?s=Z+Interactive#chart2:symbol=z;range=5d;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

  6. 6
    Macro Investor says:

    The fear of everything financial caused the economy to freeze by late 2009. It was like a gaper’s block on the freeway — everyone just slowed down to look. This “growth” has been nothing more than a rubber band snapping back.

    The data now shows another slowdown started around mid may. We’ll see how long it lasts and how deep it goes. Betting on a return to normalcy is a bad bet. People and businesses are still mostly tapped out on debt. Only uncle sam can continue growing debt, for as long as that lasts.

  7. 7
    BillE says:

    I’m doing my part to help the local real estate scene. Finally, after all these years, I’m buying a house.

  8. 8
    JG Bell says:

    Bingo 1 – While you say you cannot imagine “govt” imploding, you don’t have to. Bcuz, tis happening all around you.

    True, what you are seeing in The Real Washington is much less than in the Sand States (+ Mich & Geo) ALL govt revenues are now down – a lot. It took a couple of years for the impacts to descend onto local govt & special service dists, but it is here, now.

    Last year the Fed stimulus package propped up state and local spending on police, fire and education. And, while it did also with unemployment insurance, what you may not know is that almost every state borrowed, from the future, from the Fed Govt, to pay the huge increase in UI claims. That borrowed money has NOT been repaid. Nor did The Big Deal cancel it either.

    That Federal “prop” is gone, and will never, ever return. THAT loss of revenue has not been budgeted – yet.

    As we learned to say in Vietnam – “INcoming” !!! As they say in Canada: “You are really Pucked, this time, Yank!”

    What you are about to see is the imploding of incoming revenues, and the continued explosion of expense and costs. Again, while you might not see it as big there in Seattle, in AZ, Nev, Cal and Fla it will be HUGE – this next fiscal year.

  9. 9

    By BillE @ 7:

    I’m doing my part to help the local real estate scene. Finally, after all these years, I’m buying a house.

    Part of “The Tim Bounce” no doubt. ;-)

  10. 10

    Does anyone know what the effect of the FAA shutdown will be in WA? Are there any construction projects going on out at SeaTac? I remember seeing one of those trucks with the big orange flag recently, but I don’t remember how recently.

  11. 11
    johnnybigspenda says:

    I agree that a large part of the ‘growth’ in the past 3 years has just been a bounce back from the abyss.

    I actually like the look of the graphs. Using the “levels seen prior to the crash” as a benchmark of health for a today’s economy doesn’t seem like the right comparison to me since there were many imbalances that finally imploded in 2008.

    I would be VERY skeptical (and afraid) if we had bounced all the way back past those levels just a year after the crash.

    What I like about the current situation is the ‘fear’ that is permeating the general concensus. Climbing the wall of worry, all the while slowly but surely improving in various sectors, one by one, quietly and steadily and naturally (ie. through capitalistic profit motivations of businesses).

    Obviously there are major risks to the recovery cycle (black swans, fear turning to panic, world events ect), but generally speaking I see the charts above as an ‘opportunity’. Things are slowly expanding and recovering, and for those who are not paralyzed by fear, there is opportunity. The pace is slow (maybe even slower than most would like), but that just means that we will be in the recovery state longer.

    Double digit growth and the desire to invest with reckless abandon (and make money) is what is wished for. Unfortunately, its not sustainable and is frought with risk of imbalances, especially if the growth is spurred on by government intervention.

    Slow and steady wins the race.

    Be optimistic.

  12. 12
    Blurtman says:

    Things could be worse. We could be living in Dallas, TX.

  13. 13
    David Losh says:

    RE: johnnybigspenda @ 11

    Yes, those are very good points.

  14. 14
    Real World Express says:

    The problem for Seattle is that its negatives far outweigh the benefits. This is a terrible area in which to be middle class…no ordinary job will get you the basics that a regular family would want.

    What is more, there are now thousands of exurbs and brand new developments that have town centres, cultural venues and Starbucks. Seattle is now just an overpriced parody of its former self.

  15. 15

    By Blurtman @ 12:

    Things could be worse. We could be living in Dallas, TX.

    Or horrible–we could be living in El Paso, TX.

  16. 16
    No Name Guy says:

    RE: Real World Express @ 14

    Huh? “This is a terrible area in which to be middle class…no ordinary job will get you the basics that a regular family would want. ”

    Suuuurrrrreeeeeee. Ask that of all the Boeing Engineers, Machinists, or Microsoft techie types.

    Lower mid career Big B engineers pull down 80k, solid mid career over 100k, senior engineers…..well, a good chunk more than that. But hey, the thousands upon thousands of ’em don’t have “ordinary job(s)”. Nope…..

  17. 17
    Real World Express says:

    By No Name Guy @ 16:

    RE: Real World Express @ 14
    Lower mid career Big B engineers pull down 80k, solid mid career over 100k…

    Which, in today’s economy, means the $540,000 house in Snohomish is too risky.

  18. 18
    No Name Guy says:

    RE: Real World Express @ 17

    Which means they actually know how to work Excel and the “pmt” function. And can actually, you know, can do the math to understand finance.

    There’s plenty of very nice places for 150-250k in south Sno Co. What kind of idiot would plunk down for a 540k property on a 100k salary? Not one engineer I work with.

    Sheese…..get into the real world there RWE and out of your self constructed fantasy land.

  19. 19
    Sniglet says:

    Interestingly, the job market seems to be very tight in some fields. I have been struggling for months to hire a full time web developer in my Seattle based company. I have been advertising everywhere and only seem to get either very junior applicants just finishing school or foreign nationals wanting Visa sponsorship. I would be delighted to hire US citizens if they would only apply for the job! Unfortunately, there don’t seem to be very many Americans going into technical fields anymore.

    I am not talking about some minimum wage hamburger flipping job, we are looking to hire someone in the $100K plus range. From my perspective, what we have in America is a mismatch in skills. The unemployed simply don’t have the necessary skills (or experience) to handle the work that needs doing.

  20. 20
    fubarrio says:

    RE: Sniglet @ 19 – yeah, a TON of ‘experienced’ people in tech got washed out and burned out after the dot-bomb and subsequent (and simultaneous) offshoring of any tech job that wasn’t nailed down.

    The result is that lots of smart technically capable people got out of the code slinging game and moved higher functioning positions (managing indians :-)), or got lured by wall street or just left tech entirely.

    one of the most talented devs i know became a patent attorney.

    the result, imo, is that the few that can”t or wouldn’t dream of doing anything else are in high demand by the few companies left that have to hire that skill domestically.

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