Extra! Extra! 6/18/08 Labor Market Update

Wow, what a difference a day (actually 10) makes! Yesterday, the WA State Department of Employment Security released unemployment and labor market data for May 2008. In the state overall, the unemployment rate shot from 4.7% to 5.3% (but still below the national 5.5% rate), while the Seattle metro area rate jumped from 3.4% to 4.1%. Both monthly increases were among the largest in the past 25+ years.

Overall, since non-farm employment peaked in February '08, the state has lost about 5,000 jobs.

Seattle metro isn't quite as bad as it sounds, but it still doesn't sound good. Software and and aerospace actually gained jobs (700 and 600, respectively), and each are doing a good job of buffeting this area from what could be a far worse situation, economically speaking. Construction employment in the area fell sharply (-900 jobs) during a time when construction hiring is typically rising. Several other areas didn't look too hot either, so thank you tech and aerospace!

Well-known regional economist Bill Conerly predicts that due to the strength in technology, that overall the state will experience "only a minor dip" in employment this year. Again, thank you tech, and aerospace wherever you can pitch in.

AHRS' Regional Labor Market Update - Summer 2008 (as of 6/08/08)

Regional labor markets off slightly, but still more healthy than nationally – recently released data shows slight job losses in Washington State and Oregon in April, in both cases less than the previous month. April unemployment rates of 4.8%, 5.5% and 3.1% respectively in Washington, Oregon and Idaho, up only slightly (0.1% in most cases) from late 2007. Regionally, as job growth has ground to a halt, job losses have remained small so far, and less in April than in March, which was the first month of declines in most states The star of the region though remains Idaho, despite its unemployment rate shooting up to a still extremely low 3.1% in April (from only 2.7% in November).

Metro areas remain stronger, with the Seattle at only 3.5% unemployment rate, seasonally adjusted, and actually below rates in late 2007. Year over year job growth of 2.0% in Seattle isn’t bad either, considering the national economy. The Portland area was also below the state’s overall unemployment rate at last check. In general, urban areas are stronger than less populated areas.

Housing markets have slowed down in the Pacific Northwest but remain substantially stronger than the US as a whole for the past two years. It still remains to be seen if the housing slowdown will have a substantial impact on the regional economy. Most economists assume there will be some slowing in the regional economy, but there is no clear evidence that the area is in a recession, despite an obvious slowing of economic activity. Most regional economists are less sanguine than a few months ago, but few are claiming that we’re in a recession right now. Oil prices also remain an unpredictable wild card for the economy.

Despite the relative regional strength, slow job and economic growth for the remainder 2008 is still likely. Even though the northwest economy is healthier than the national one (WA Stage GDP was the third strongest in the nation in 2007 and early 2008), it doesn’t mean we’re “out of the woods” yet. Despite this, even in today’s weaker economy, many employers continue to report difficulty in hiring some skilled workers, especially experienced technology and engineering professionals, and in the nursing/health care, accounting and finance areas.