February 29, 2008
Downshifting Washington's job growth
Seattle Times business reporter
ALAN BERNER / THE SEATTLE TIMES
Turns out Washington's jobs engine wasn't revving quite as fast last year as previously thought.
The state's nonfarm payrolls grew by 61,900 jobs, or 2.16 percent, in 2007 — 15,300 jobs fewer and half a percentage point slower than initially reported, according to newly revised data released Tuesday by the state Employment Security Department.
Construction, hit by the slowing housing market, was a big factor in the decline.
The construction industry last year added fewer than half the 13,700 jobs that state economists first thought, with all the gains coming in nonresidential construction.
The revisions to 2007 data somewhat overshadowed the jobs numbers for January.
The state's seasonally adjusted unemployment rate stood at 4.5 percent, down a tenth of a percentage point from December. The statewide rate has been at or within a tenth of a point of 4.5 percent for 13 straight months.
In the Seattle metro area, the state's biggest market, unemployment ticked up to 3.7 percent last month from 3.6 percent in December — still below both the statewide rate and the 4 percent rate posted a year earlier.
"Seattle's probably doing a little bit better overall than the state," Employment Security economist David Wallace said.
Washington added a total 5,800 nonfarm payroll jobs in January, versus a downward-revised gain of 2,900 jobs in December.
The revised jobs data show that growth decelerated throughout 2007, from 2.6 percent in the first quarter to 2.3 percent in the fourth quarter.
In January, payrolls grew 2.1 percent compared with January 2007.
Still, that was nearly three times the U.S. growth rate in January — evidence that despite the slowdown, Washington's economy continues to be among the nation's strongest.
The monthly payroll numbers are derived from a survey of employers. Four times a year, the state uses employers' unemployment-tax filings to revise those survey-based estimates, to make sure they reflect the actual makeup of the work force.
(The unemployment rate is derived from a separate survey of individuals — not, as is often believed, by counting how many people are collecting jobless benefits.)
The revised data helped answer a question that economists have been puzzling over for months: How could the state's construction industry keep adding jobs despite the end of the housing boom?
In fact, the residential-construction sector has lost 4,100 jobs since peaking at 101,400 in June. Last month, there were 97,300 residential construction jobs, 4 percent below the peak.
But nonresidential construction — office buildings, shopping malls and the like — gained 7,100 jobs last year. However, the sector fell by 1,000 jobs in January, to 84,900 jobs.
(Heavy and civil engineering, the third construction-industry sector, has lost 1,500 jobs since peaking in March 2007, employing 22,900 people in January.)
The revision also cut the reported 2007 job gains in the professional and business services sector, from 12,100 to 10,800. Financial activities swung from a 1,200-job gain to a 1,400-job loss, due to cuts at lenders.
On the other hand, aerospace manufacturing gained 400 more jobs last year than initially reported, for a 6,200-job gain.
The sector added 800 more jobs in January, nearly all of them in King and Snohomish counties.
The statewide gain in education and health services also was revised higher by 400 jobs, for a total gain of 11,500 jobs last year.
Despite what was widely considered a weak holiday shopping season, the state's retail sector showed a 2,100-job gain in January.
But Wallace said that was likely a glitch arising from the seasonal-adjustment process, which essentially compared the raw gains and losses to historical norms.
"Our take on it was that the December [retail jobs] numbers came in so poorly, especially compared to past Decembers, that there weren't that many people to be laid off in January," he said.
Drew DeSilver: 206-464-3145 or firstname.lastname@example.org
Copyright © 2008 The Seattle Times Company
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