July Jobs: Mixed Bag
Since the housing market is so closely related to whether people can find decent jobs, here is the latest in our continuing series on Washington State employment statistics. Things are looking up... sort of.
Washington's jobs picture was mixed in July, and revised data shows that the first half of 2006 wasn't quite as red-hot as first appeared.8,700 new jobs is definitely better than the previous six months. However, it's interesting to see exactly where those 8,700 jobs are coming from (and where jobs are leaving):
The state added 8,700 jobs last month, according to seasonally adjusted figures from the Employment Security Department, but the unemployment rate edged up to 5.3 percent from 5.1 percent in June.
Evelina Tainer, chief economist for the department's Labor Market and Economic Analysis branch, said the increase in the jobless rate wasn't statistically significant. But since the rate was as low as 4.6 percent as recently as March, it's worth watching.
...
Instead of the 6,900-job average monthly gain that had been previously reported, Washington actually added an average 5,400 payroll jobs each month between January and June.
"On the whole, I think the numbers are still looking pretty good," Tainer said.
Wholesale and retail trade in the state showed the biggest job drops last month, respectively losing 800 and 1,000 jobs, since June.The P-I offers some additional analysis:
...
Education, both public and private, posted the strongest gains in the month, a total of 6,200 jobs. However, Tainer questioned whether that was due more to the quirks of the seasonal-adjustment process than real growth, noting that those same sectors lost 6,400 jobs in June.
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Statewide, professional and business services, something of a catchall category for white-collar jobs, added 2,200 jobs in July, with most of the gains coming in managerial, administrative and support jobs.
Construction, which has been one of the mainstays of the state's economy, lost 2,000 jobs last month, due entirely to declines in the heavy and civil-engineering sector.
In King and Snohomish counties, though, 3,000 construction jobs were added in July, and manufacturing added another 1,300 jobs.
The largest job growth occurred in government (up 4,200 jobs), education and health services (3,100 jobs) and professional and business services (2,200 jobs).So disregarding the odd fluctuation in education, we're really only talking about a net 1,500 jobs. Not exactly an economy to write home about. However, there is definitely some ammunition in there for the Seattle is Special™ crowd, what with construction jobs decreasing statewide (by around 5,000 jobs!) but increasing in King & Snohomish. I also notice a distinct failure to mention what's going on with jobs related to real estate. Presumably they were mostly flat last month. Particularly interesting to me is that retail is floundering. Perhaps the housing ATM is drying up, even here in Washington?
Retail trade lost 1,000 jobs, financial services lost 300 and information lost 200.
Whichever way you slice it, it's pretty difficult to skew these numbers to fit a "Seattle's economy is booming" argument. I think at best, we're treading water right now.
(Drew DeSilver, Seattle Times, 08.15.2006 )
(Drew DeSilver, Seattle Times, 08.16.2006)
(Dan Richman, Seattle P-I, 08.16.2006)
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5 comments:
Dukes has it right, every market that has declined significantly has seen an increase in median price while sales start falling off.
Why? My guess is that both buyers and sellers are riding the last emotional wave before the crash.
"UW research funding has been slashed and is at an all time low...there are literally dozens of doctors who worry their labs are going to go under."
That Times article hit really close to home for me -- I'm a PhD student at the UW, and I know many faculty members sweating out the next grant. When that happens, the rest of us sweat too -- there's already been an uptick in pressure for graduate students to teach for their money (as opposed to research assistantships, which are the tradition) and that isn't a good sign.
If UW research funding continues to fly into the ground, there's going to be a steaming crater in the local economy. Despite what you may have heard, there isn't nearly enough biotech in the region to absorb all of the lab techs, post-docs and unemployed faculty that will flow from the UW in a panic.
The basic argument that if jobs are strong the local real estate market will flourish is just half of the equation. The other half is obviously housing prices (affordability). I personally think the most interesting measure to track would be some kind of ratio of (job growth + income growth)/affordability.
"Whew! Thank goodness I can snag one of thousands of new Microsoft jobs they're about to create, right guys? (crickets chirping)"
(Reposting this from bubbletracking)
I work at MSFT, supposedly one of the unstoppable engines of job and income growth fueling the housing market. It's steady enough, but hardly the money fountain needed to support these runaway prices. Raises here have been mostly sub-inflation (~3%) for years, and people freely admit that homeownership has been far more lucrative than their income.
Also, the bulletin boards are suddenly crammed full of ads to sell or rent houses and condos. Guess those bidding wars are a thing of the past.
"Dukes has it right, every market that has declined significantly has seen an increase in median price while sales start falling off."
Exactly. Thanks to Ben's blog, we've long since seen how that story ends. No different than a stock peaking on declining volume as the last of the bagholders pile on.
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