Seattle Labor Participation Outperforming National Rate

In the comments on yesterday’s jobs post, Blurtman leveled the following criticism:

Shame on you, Tim, for publishing misleading data. You cannot say that unemployment has dropped nationwide without also commenting on the record high not in the labor force number. I trust you are not turning into a NAR cheerleader at this stage. Remember, if there were zero jobs, and folks stopped looking, the unemployment rate would be zero, and yet no one would be working. Tsk, tsk…

The jobs posts, like most of the content on this site, are intended to be primarily about what’s going on in the local area, and as the first chart showed, the number of jobs in the Seattle area has been growing since late 2010. That’s hardly a “zero jobs” scenario.

That said, I love a good data request, so here’s a chart of national labor force participation alongside the unemployment rate:

Unemployment & Labor Participation - national, seasonally adjusted

Indeed, in 2006-2007 when unemployment was at its lowest (~4.5%) before the housing bubble popped, the national labor force participation rate was at 66.3%. As of March it is three points lower at 63.3%, while unemployment stands at 7.6%.

Here in the Seattle area the picture is somewhat different, though:

Unemployment & Labor Participation - Seattle area, seasonally adjusted

In early 2007 when Seattle’s unemployment was as low as 3.6%, the local labor force participation rate was at 69.5%. As of March, unemployment is at 5.5%—nearly two points higher than it was pre-bust—but the labor force participation rate is virtually the same, at 69.0%.

Even when you include the labor force participation rate in the local picture, the jobs situation is clearly improving. That’s not to say that the jobs that are being added pay well compared to those that were lost during the bust, but there’s no denying that the Seattle area is adding jobs and unemployment is falling fast.

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.


  1. 1
    3rd Generation says:

    Falling fast, eh ? It’s different here . . .

    “but there’s no denying that the Seattle area is adding jobs and unemployment is falling fast.”

    Lots of openings for Apartment Security Guards in Federal Way. No experience required.

    Please pass the Kool Aid. It’s being served up cold daily at SB.

    Keep playing with your coloring charts. You always have the Redfin goig to fall back on.

  2. 2
    johnnybigspenda says:

    Would be interesting to look at average worker’s age over this time period as well. Isn’t there a wave of Baby Boomers retiring? This would affect the participation rate. The confounding factors are: older workers who can’t retire, the effect of older workers not leaving and thus occupying jobs that mid-career folks would normally be moving into, older workers who retired a bit earlier than they expected due to job loss and inability to get rehired. I have no data, but I have to believe its having an effect, or will have an effect over the coming years.

  3. 3
    The Tim says:

    RE: 3rd Generation @ 1 – You accuse me of serving up Kool-Aid, but you’re the one spouting empty, emotionally-charged claims while I’m bringing data, the same as I always have on this site. If you think things are dire, show me the data to back it up.

    “In God we trust, all others bring data.”

  4. 4
    HappyRenter says:

    I’m not sure that it makes sense to compare two time points on a curve. One should find a different measure. If you compare today with the fall of 2009 when the participation rate was 71% you see that it declined of 2% points (~3% in relative numbers). It seems that in Seattle there was a delay of 2 years compared to the rest of the country. So maybe you should not compare today with 2007 (like you do for the national data) but with 2009? Between 2007 and 2009 the national participation rate had already started dropping but in Seattle it kept increasing for some reason until we were also hit by the real estate and financial crisis.

    You might be right that the unemployment rate is going down fast but a chunk of that might still be due to people leaving the work force. Even if the participation rate is at a similar level as 2007 your plot shows that it’s in a worrying downward trend. Your data is good but I think that its interpretation needs to be done more carefully.

  5. 5
    Joe says:

    I’m curious to know if there have been any shifts in population counts up or down that might affect the unemployment rate in your area?

  6. 6
    mike says:

    RE: HappyRenter @ 4 – That’s an interesting point. I was in the DC area in 2007 when house prices were plunging with no bottom in sight – that market was about 18 months ahead of Seattle. Unemployment there was 1.7% at the time. It became really clear that the foreclosures at that stage were not due to job losses! Perhaps the explanation is the early job losses were mostly among the huge population of undocumented workers, as the neighborhoods with high concentrations collapsed first and fastest.

    I would not be surprised if Seattle’s workforce participation declined approximately 2 yrs after WAMU entered its death throws.

  7. 7
    Erik says:

    RE: The Tim @ 3
    I have no data, but I foresee the area losing more jobs because some major programs at Boeing are winding down. When they finish, they will probably move more of their operations to South Carolina and the area will lose more jobs. There are some pretty strong indicators that this will happen.

  8. 8
    doug says:

    The charts pretty much just so the past so we must use them to see if we can find any meaningful data to support our beliefs. I have used charts successfully for trading financial markets for 30 years. The problem with today is most charts are being controlled by government and corporations. For instance the DOW is artificially inflated by financial institutions to prevent total mayhem from the people. One chart that should be put up is the TRIPLE TOP on the DOW a chart that big that long means only one thing if the third top cant be taken out its going down hard.
    first top=nasdaq, second top= real estate, third top=everything

  9. 9
    Topdog says:

    Thanks for your data Tim, love the charts and comparisons.

    One problem, employment data is not necessarily full time employment data. If a person cat sits for two hours a week, where their previous employment was full time at a $65K, that person is still considered employed. These days businesses are known to replace one full time position with two part time ones to avoid some of the draconian consequences of the healthcare law. This data tells us only a hint of the story.

    The data I want to see is median household income. That relative to the median cost of living is a profound meaningful story.

  10. 10
    David Losh says:

    I don’t see why any one would question that we have jobs here in Seattle.

    Boeing might be a stretch, but in terms of tech jobs, or anything Amazon, I think Seattle is a mecca.

    If you look around Seattle we also have a building boom of apartments, I see lots of home projects, and yeah, retail has picked up.

    Home prices may be out pacing wages, wages might even be low, but there are unfilled opening at Microsoft, and the Bill and Melinda Gates Foundation can’t be ruled out of the job pool.

    We have money here in Seattle that I see is being spent, so for me that is all the proof I need to know we have jobs.

  11. 11
    ImportedCraker says:

    RE: Erik @ 7
    There are no “major” programs winding down at Boeing. The layoffs announced in April were expected. If you call change incorporation and refurbishment “major,” then you are misinformed since those are the programs winding down.

  12. 12
    Eastsider says:

    You should definitely check out the number/proportion of people on food stamps or collecting disability benefits. From the data that I have seen, we are fast becoming a “disabled” nation.

  13. 13
    ChrisM says:

    Tim – I’m a little dubious of the seasonal adjustments — both adjusted U6 & non-adjusted U6 are available at — can you graph the Seattle vs. national data? I’m not sure it is possible…

    PS – and let me say that Ultima 6 was a wonderful game… :-)

    PPS – I guess another question I have is which U you were using for national unemployment rate? Also, where do you get the Seattle unemployment numbers?


  14. 14
    Blurtman says:

    RE: Topdog @ 9 – Quite right.

    Top Line Employment Looks Good, But Full Time Job Growth Is Falling Apart Since QE3

    “Once again this month, the actual data was smack on the trend of the past year. The number of jobs has been growing at virtually the same rate for the past 18 months, around 1.5% per year, give or take a tenth or two. The growth in jobs is tracking population growth, therefore there has not been, much reduction in the unemployment rate.”

    “Here’s where we get to the problem. Full time employment growth is badly lagging total employment. Part time jobs are nice, and for many that hold them, they are a lifeline, but the important metric here is full time jobs. Without those, we’re dead. ”

    “The 10 year average increase in full time jobs for February was 216,000, pulled down by a big negative number in 2009. Excluding that year, the average would have been 336,000. This year’s gain was short of that average and was better than only 4 of those 10 years, as well as weaker than the last 2 years. This is bad news. The anecdotal reports that there aren’t enough good jobs out there are supported by these numbers. QE3-4 is not helping. The market did better last year when the Fed was in a QE pause.”

  15. 15
    Blurtman says:

    The stagnation behind the excellent jobs report

    “All is not entirely sweetness and light, though, as Brad DeLong and many others have noted. The number of multiple jobholders rose by 340,000 this month, to 7.26 million — a rise larger than the headline rise in payrolls. Which means that one way of looking at this report is to say that all of the new jobs created were second or third jobs, going to people who were already employed elsewhere. Meanwhile, the number of people unemployed for six months or longer went up by 89,000 people this month, to 4.8 million, and the average duration of unemployment also rose, to 36.9 weeks from 35.3 weeks.

    In terms of the economy, it’s not good enough to simply increase employment and decrease unemployment, if the proportion of people with jobs isn’t actually going up.”

  16. 16
    David B. says:

    RE: David Losh @ 10 – Precisely. It’s not perfect here (I’ve grumped about Seattle in the comments here before, and probably will again) but of all the cities which are centers of high tech employment (for better or worse, the field I’m in), Seattle is by far the best choice for me.

    I don’t think I could ever call Silly Valley, LA, Austin, Boston, or the NYC area “home”.

  17. 17
    Erik says:

    RE: ImportedCraker @ 11
    Remember when Boeing decided to make an all new airplane out of composite material they call the 787 and launch the 747-8 at the same time? They hired a lot of people for that and they cannot maintain that many employees to sustain those programs.

  18. 18
    hoary says:

    By Erik @ 17:

    RE: ImportedCraker @ 11
    Remember when Boeing decided to make an all new airplane out of composite material they call the 787 and launch the 747-8 at the same time? They hired a lot of people for that and they cannot maintain that many employees to sustain those programs.

    Haven’t been to the SB comment section in far too long, but I’m glad to see the echo-chamber of emotion-based-misinformation & national/regional conflation is still running strong!

    Per Boeing:
    They have over 1,000 orders of the 737-MAX on backorder (data point 1!)

    The plan is to build the 737-MAX at the Renton plant (data point 2!)

    Per the local job market:
    It’s very strong for reasons multifarious (not the least of which is the absolute feeding frenzy in the tech sector right now). The diverse base of tech, aerospace, retail (do you know any AMholes? I probably know a hundred), and wholesale is percolating through the rest of the local economy, levitating local construction, service-based industries and, *GASP*, real estate.

    Uh-oh, another link supporting my statements below (toggle to Sea-Evr-Bel MD on dropdown):

    That Tim…such a koolaid drinking, cheerleader these days. Must be because he’s apart of the property owning class. The nerve of that guy! Sorry for all the informative links. Bring out the downvote monkeys to punish my impudence!

  19. 19
    Erik says:

    Okay, well, if you think that, keep thinking it. You are a fool.

    On the design and development side, there are a lot of employees that cannot just be moved to manufacturing. It takes a lot more employees to design something new then to produce more. Boeing is doing tons of research and design right now. Those efforts will reduce as the programs age. Boeing hired tons of engineers just to develop the new technology of the 787. Those good jobs will reduce if Boeing does not do more development.

    But whatever, I don’t know anything about Boeing cause you read the paper. Don’t listen then.

  20. 20
    Erik says:

    RE: hoary @ 18
    How do you know so much about Boeing? My guess is you read what is published in the paper, which is what they want you to see. If you want to understand Boeing, you need to use your own logic. It seems you are lacking in the logic department.

    I really hope that Boeing does more development because the days of manufacturing here in Washington are going to be slowly eliminated. IAM signed a 20 year agreement that keeps the 737 in renton, but after that agreement is up, it will take a lot of persuasion to keep them in the area. It really doesn’t make sense for them to run production in an expensive area. There is a case for design here because there is so much talent in this area.

    I encourage you to reply with something intelligent before you spout off newspaper clippings you read. You may know more about real estate…. i’m here just trying to learn. You do not know more about Boeing than me.

  21. 21
    James says:

    @Tim I was wanting to know if you actually had the job growth numbers for Seattle, I’ve been trying to find them, but I unable to find anything newer that 2013 which isn’t helping me. The Labor Force Participation Rate and Unemployment rate improving would indicate that job growth has occurred, but I’m trying to find the numbers on the actual job growth numbers. Thanks for the help.

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