UPDATE: Unemployment rate likely unchanged despite some job gains
County added 900 jobs in a year; 442 a month would get back to normal by 2016
Originally published October 25, 2011 at 1:27 p.m., updated October 25, 2011 at 5:32 p.m.
Clark County employers have added a net 900 jobs in the past 12 months, a small climb that likely left September’s unemployment rate at roughly 12 percent, Scott Bailey, regional labor economist for the state Employment Security Department, reported on Tuesday.
Professional and business services employers have added 1,000 jobs since September 2010, more than any other sector, while the leisure and hospitality industry shed 600 jobs.
“Staffing agency employment has been trending up over the past few months, an encouraging sign,” Bailey wrote in his “Southwest Washington Labor Market News” report.
Health care continues to be a major source of new jobs, adding 700 in Clark County in the past year.
However, the construction sector, just like leisure and hospitality, has lost 600 jobs since September 2010.
“Construction is still looking for a bottom,” Bailey said in a phone interview.
‘A worrisome picture’
The earliest realistic time line for the county’s economy to return to pre-recession employment levels is five years, according to an analysis by Bailey, and even then the odds aren’t good.
To recover by 2016 and drive down the unemployment rate to 5 percent, the county’s job growth would have to average 4 percent a year, or 5,300 jobs annually. The county would have to create roughly 442 jobs per month to recover by 2016.
There are no signs that such rapid growth is on the horizon, especially in light of the nation’s feeble recovery and of the European debt crisis.
In his labor market report, Bailey said the nation’s job growth for the year has averaged 95,000 jobs monthly, but the U.S. needs 130,000 new jobs per month just to keep up with population growth, “so we’ve actually been losing ground this year.”
Meanwhile, the Greek economy “is in a nosedive” with the debt problem worsening, Bailey wrote.
“If Greece had defaulted on its debt, withdrawn from the European Union and devalued its currency (something it cannot do now because it uses the Euro) it would be on the road to recovery, as evidenced by what happened recently in Iceland … and a few years ago in Argentina (few people realize that since defaulting in 2002, Argentina has grown twice as fast as Brazil),” Bailey wrote.
Instead, Europe seems headed for a bigger crisis, according to Bailey.
“While U.S. banks are not large holders of Greek debt, they are tightly connected with European banks,” Bailey said in his report. “Because of the lack of transparency, no one knows what the impact on the U.S. financial system will be.”
In a phone interview Tuesday, Bailey said Europe’s problems are a continuation of the U.S. financial crisis of several years ago, only this time it involves the debt of countries rather than toxic mortgage-backed securities. And, Bailey added, it all “ties back into weak demand here because of joblessness and hours cut and very little business investment going on.”
Though Clark County’s economy remains weak, the unemployment rate is lower than it was during the depths of the recession, which wiped out more than 10,000 Clark County jobs from early 2008 through earlier this year, or roughly 7 percent of the county’s nonfarm job base.
The county’s jobless rate was 14.1 percent in July 2009. It peaked at 15.7 percent in January 2010, according to state data.
Bailey’s report on Tuesday showed that September’s preliminary unemployment rate was 9.3 percent. However, that initial jobless rate will likely increase to roughly 12 percent when revisions are made later to account for unemployed Clark County residents who previously worked in Oregon.
The same type of adjustment was made for Clark County’s August labor market results, with a preliminary jobless rate of 10.4 percent revised upward to 12.7 percent.
The revised unemployment rate for August was a point lower than the 13.7 percent jobless rate in August 2010, according to Bailey, “but much of the decline in unemployment was due to some of the jobless giving up looking for work.”