In Our View: Stranded on a Plateau
‘Jobless recovery’ is real, and a lot longerthan many of us had envisioned
Monday, April 23, 2012
Remember the “jobless recovery” that was supposed to lead to a broader economic rebound at the local, state and national levels? Well, that path has become painfully long, and our recommendation to families and businesses is to accept the grim reality that a powerful economic rally remains far beyond the horizon.For every bit of positive financial news (did you know the Nasdaq has soared 77 percent in the past three years?), there always seems to be a negative splash in the face (the Dow’s all-time high is fading into antiquity, 54 months in the past).
At the local level, the cure to a sick economy remains as elusive as it is obvious: Construction and home values must be brought off life-support before any real hope for a recovery can be entertained. And that means elected officials and policy setters must sharpen their focus on job creation. Economic development missions have never been more critical in Clark County. Here is just a partial list of the back-and-forth trends that keep the state and local economies stuck on a figurative plateau:
Clark County’s unemployment rate has improved considerably since its peak of 15.8 percent in January 2010. On the other hand, at about 11 percent (in February; little change is expected for March), the local jobless rate remains almost three points higher than the regional, state and national jobless rates.
In the past year Washington employers have added a net 58,000 jobs. But job growth in March was flat, and 77,512 Washingtonians ran out of unemployment benefits as of April 7. Another 22,000 will likely lose benefits by mid-June.
The number of foreclosures in Clark County has fallen for 10 consecutive months, to 134 homes in February, down 65 percent from the same month in 2011. However, another increase in bank foreclosures could be imminent. According to a Sunday Columbian story by Gordon Oliver, “a recent legal settlement between many states and major lenders eliminates legal ambiguity about foreclosure actions and could lead to a new wave of bank foreclosures.”
Jobs statewide have been added in 10 sectors, and only three sectors have seen declines. Manufacturing led the way with an estimated 14,600 new jobs, with the aerospace industry accounting for 9,400 of those jobs. Still, the state’s March jobless rate of 8.3 percent was unchanged from February.
Local construction saw a ray of hope in March when 61 permits were issued to build single-family houses in the county. That’s a 35.6 percent increase from the same month last year. By the same token, overall construction throughout the community remains anemic, and that one sector acts like a foot on the throat of any recovery. Only 500 construction jobs were added in March in the entire state.
Washington has seen net job growth in 18 of the past 19 months. December was the lone exception. However, even with the surge in Boeing sales, the state’s unemployment rate is stalled at 8.3 percent, slightly behind the national rate of 8.2 percent.
The painful truth is that the “jobless recovery” is becoming more than just the brief prelude that many economists envisioned. Bret Bertolin, senior economist for the Washington State Economic Forecast Council, proffered a more accurate description of the economy in his Friday speech at Washington State University Vancouver. He said we will “continue to see a muddle-through economy, with low growth, high unemployment and weak confidence.”
The economy is better than three years ago, no doubt. But families and businesses must face the reality of a lingering economic inertia.