Clark County unemployment climbs to 8.2 percent, the worst in nearly 5 years

Clark County's unemployment rate climbed to 8.2 percent in November , reflecting job losses in construction, manufacturing, retail, and professional and business services, the state Employment Security Department announced today. The numbers portray the worst jobs situation for the county since February 2004, when unemployment stood at 9.5 percent in the aftermath of a recession that hit Southwest Washington hard.

About 18,250 county residents were jobless and looking for work in November. Unemployment claims were up 75 percent from November 2007, state economist Scott Bailey reported.

Health care remains a bright spot, adding 100 jobs over the course of a month. The sector is up 700 jobs from a year ago. And government has added 600 jobs in the past year - 200 at the state level, 300 in schools, and 100 at other local agencies.

The statewide unemployment rate of 6.4 percent underestimates the full toll that the economic slowdown has taken across most of Washington. Though unemployment remains below 6 percent in Bremerton, Bellingham and Seattle, Southwest Washington and many rural counties have been hard hit. Cowlitz County's jobless rate is at 9.5 percent, Skamania's is at 8.8 percent.

"To property assess how bad a month November was for the state economy, one has to factor out the down and up of the Boeing strike, which sidelined 24,000 workers in October," Bailey wrote in his monthly labor market update. "Once that is taken care of, the result is a loss of 2,100 jobs in October and 11,700 in November, making it the worst month so far in the downturn. Since its peak in February, the state has lost 33,100 jobs, 1.3 percent of its workforce."

Construction and manufacturing account for three quarters of the statewide decline, but most major sectors have lost jobs over the year, Bailey said.

Click to read the full text of Bailey's national, state and Clark County job report (which includes rock-n-roll quotes and commentary every month).

By Scott Bailey, regional economist

Monthly Review

“And I’m going down, all the way down...”
Highway to Hell, AC/DC

“We’re all subprime now!”
Doris Dungey , 1961-2008 *(more info)

State of the Nation
Where to begin…
- Labor market? This month’s report was even worse than you thought, as if the loss of 533,000 jobs wasn’t bad enough, or the downward revisions of the past two months’ declines. That makes 11 months in a row, for a total of 1.9 million jobs lost. No, it was even worse. Over 400,000 people dropped out of the labor force, and the number of workers wanting full-time work but only able to find part-time employment rose by over 600,000. The average work week slipped to 33.5 hours, the lowest since the series began in 1964. Businesses are cutting hours, trying to postpone layoffs that may be inevitable. The unemployment rate rose two tenths of a point to 6.7 percent, but the broadest measure of unemployment, U-6, jumped seven tenths of a point to 12.5 percent, the highest rate since the series began back in 1994.
- Housing market? Foreclosures are projected to grow from less than 2 million today to over 8 million by 2012, according to analysts at Credit Suisse. That would represent 16 percent of all homes with mortgages. Fewer than half will be sub-prime, most will be prime or Alt-A mortgages. Plans to stem the foreclosure flood by modifying mortgages do not appear to be working; more than half of all workouts in the first quarter 2008 were delinquent within six months. Back in 2001, U.S. homeowners’ equity amounted to 60 percent of the value of their homes. Last quarter it fell below 45 percent, the lowest on record.
- Commercial construction? Delinquencies on commercial real estate loans are now tracking with those on residential loans. A host of indicators point to a downturn in commercial activity in the coming months.
- Manufacturing? Does anything more need to be said about automakers? The Big 3 and the United Auto Workers have taken their lumps of late, but a few things should be remembered before casting more stones. Auto sales have cratered for not only Ford, GM, and Chrysler, but Toyota, Honda, et al. Second, the latest labor pact will bring UAW labor costs in line with those at non-union U.S. car factories within a few years. Third, much of the higher labor costs for Big 3 cars are due to the legacy costs of their retirees. The newer Toyota and Honda plants haven’t been around long enough to have to deal with retiree costs. If the new administration wanted to do one thing to help the auto industry, it could nationalize the health care finance system. It’s always been a mystery why the Big 3 fight against a national health care system in the U.S., while their Canadian subsidiaries fight to defend socialized health care in that country.
- Cars + banks? Were GM to go bankrupt, the fallout would be severe for workers, retirees, and parts suppliers (many of whom are owed money by the Big 3 and are already teetering on the brink). Should parts suppliers fold, other U.S. car manufacturers (Toyota, Honda etc.) would be impacted. And lurking in the shadows is the chain reaction in the financial industry from all the credit default swaps (CDS) written against GM debt. A CDS is basically a bet or insurance policy taken out on a bond, in this case a bond sold by GM. Banks that wrote those insurance policies would be forced to cough up billions.
- Trucking? "We're settling in for nuclear winter in the first half of 2009," says Steve Gordon, operating chief for [Gordon Trucking Inc.]”
- Retail Sales? Down in October, down again in November. The drop from last November to this November was the biggest on record.
- Exports? U.S. exports are falling, and so are our imports (along with Europe’s). As a result, China’s economy is looking increasingly weak. China’s electrical consumption was down 9.5 percent last month from the previous November, indicating a large decline in industrial activity.
- Financial markets? Despite hundreds of billions of dollars being pumped into the banking system, big banks have not increased their lending. “Lenders who receive public funds should use those funds to lend,”according to Sen. Christopher Dodd—which just goes to show that some policymakers don’t understand, we only have a liquidity problem (lack of lending, frozen markets) because we have an insolvency problem (banks don’t have enough capital due to all of the bad loans they made). A different point of view:
Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded… While not saying how long the U.S. economic recession will last, he said conditions could ultimately mirror those of Japan in the 1990s. "The way things are going, we're going to have a lost decade too, just like the 1970s," he said.
While Mr. Rogers may be overstating the poor conditions of the larger banks, the fact is nobody knows for sure. The Treasury Department simply hasn’t done the due diligence to assess the conditions of the large banks—as became clear when Citi came begging for a bigger bailout. Who’s next?
- Sports? The Arena Football League cancelled its entire 2009 season. Even the NFL is laying off staff. Now can you hear the hoofbeats of the four horsemen? And no, not the ones from Notre Dame...
- Finally, two “positive” notes. AIG, the insurance giant of which we (taxpayers) now own 80 percent, announced it is close to selling off a number of its assets, and so may begin to pay us back. We’ll see.
- And according to the Case-Shiller index, the Portland metro area is still doing relatively well in terms of housing prices: a drop of only 9 percent in September from their peak in August 2007. Seattle is not far behind at 10 percent. Those were the two smallest declines for major metros areas, excepting Dallas and Denver, which had far smaller appreciations in prices during the bubble years.


State of the States
To properly assess how bad a month November was for the state economy, one has to factor out the down and up of the Boeing strike, which sidelined 24,000 workers in October. Once that is taken care of, the result is a loss of 2,100 jobs in October and 11,700 in November, making it the worst month so far in the downturn. Since its peak in February, the state has lost 33,100 jobs, 1.3 percent of its workforce. Most major sector has lost jobs over the year, though construction and manufacturing account for three-quarters of the decline; health care, information (thanks to software), professional services and government have been the only gainers. The unemployment rate inched up a tenth of a point, but if the state is anything like the nation, then hours have been cut and the number of part-time workers has increased.

Over the past four months, Oregon’s labor market has pulled a Thelma and Louise and driven off a cliff. Back in July, employment growth was slightly negative over the year. Payrolls have since dropped by a total of 32,400 jobs, including 6,300 in November. That means 1.8 percent of the state’s employment has disappeared in only a third of a year. Let’s avoid temptation and not calculate the annualized rate. Over the last two months, unemployment has jumped from 6.4 percent to 8.1 percent. Construction continues in its free fall (-12 percent), and now leisure & hospitality is starting to cave, losing more than two percent of its total in the past three months. The quick-turn-the-state-into-a-bank-to-get-TARP-funds joke is already getting stale.

Regional Roundup
Collectively, unemployment in our three-county region [Clark, Cowlitz, Wahkiakum] was 8.4 percent, up 3 points since last November. The number of unemployed, at 22,770 residents, is up 62 percent. Almost 6,400 of the unemployed filed a claim in the state of Washington (and more residents have filed claims over in Oregon)—70 percent more than a year ago. Total nonfarm employment is now 710 jobs below year-ago levels (-0.4 percent), while private sector payrolls are down 1,310 (-0.9 percent), and the entire Portland metro area has now lost jobs over the year (-1.1 percent through October).

Clark County
Clark County nonfarm employment was unchanged in November, staying at 136,700, matching last November’s total.
- The private sector has lost 600 jobs in the past year.
- Construction (-800) and manufacturing (-500) continue to drag the economy down. Machinery has lost 200 jobs in the past year.
- Retail trade is off by 200 jobs, all at specialty stores.
- Financial services employment is flat over the year.
- Professional & business services year-over-year gain has fallen to 200 jobs, as anticipated.
- Health care continues to grow steadily.

Construction employment dropped by 400 jobs in November, following the typical seasonal pattern. The total of 12,000 was 800 jobs less than a year ago (-6.3 percent). Residential construction continued to be slow, with a total of 1,264 housing permits issued through October, continuing to point towards the weakest year since 1984.

Manufacturing employment fell by 100 jobs over the month, a typical seasonal result for November. The total of 13,500 was 500 below the year-ago level.

Trade, transportation and utilities added 200 jobs over the month. Wholesale trade dipped by 200 jobs to 5,300, 200 below last November. Retailers added 400 seasonal hires, 100 below the usual pattern, and lagged last November’s total by 200 jobs. Transportation was unchanged at 4,100 jobs.

Information services held firm at 2,700 jobs, down 100 from a year ago.

Financial activities rose by 100 jobs in November, and matched its year-ago level of 6,600.

Professional and business services fell by 100 jobs over the month to 15,200 jobs. The loss was due to seasonal layoffs at temp agencies. Professional services remained at 6,900 jobs, the same as a year ago. Business services, at 7,000 jobs, was 100 higher than last November.

Education and health services rose by 100 jobs in November, all in health care. The total of 18,300 jobs was 700 higher than a year ago, with education services up 100, health care up 500, and social services up 100.

Leisure and hospitality employment edged up 100 jobs in food services in November. This sector, now employing 13,500, has added 200 jobs over the year, including 100 in arts, entertainment and recreation services, and another 100 in food services.

Other services – personal services, repair services, community organizations – employed 4,500 in November, the same as October but up 100 from a year ago.

Government employment rose by 100 jobs in November, including 200 in K-12 education. Growth over the year was 600 jobs (2.5 percent): 200 at the state level, 300 at K-12 schools and 100 at other local government agencies.

The county’s jobless rate was estimated at 8.2 percent in November, three points higher than a year ago. About 18,250 county residents were jobless and looking for work. The number of continued unemployment claimants rose by 25 percent over the month, and was 75 percent higher than a year ago, more than the state average of 59 percent. The occupational groups with the largest increase were construction workers, clerical workers, managers, transportation workers and production workers.

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Doris Dungey (a.k.a. Tanta), a refugee from the mortgage industry who blogged at Calculated Risk, died from ovarian cancer last month. Using her in-depth knowledge of the industry she documented the abandonment of due diligence and any kind of lending standards and early on foresaw the meltdown of the housing market and the bankers who securitized mortgages. Thanks to the following blogs for news and thoughtful analysis: The Big Picture, Calculated Risk, naked capitalism, and Brad Setser. Neither the state of Washington, nor any agency, officer, or employee of the state of Washington warrants the accuracy, reliability or timeliness of any information published by this system, nor endorses any content, viewpoints, products, or services linked from this system, and shall not be held liable for any losses caused by reliance on the accuracy, reliability or timeliness of such information. Portions of such information may be incorrect or not current. Any person or entity that relies on any information obtained from this system does so at their own risk.