My 2012 forecast for Clark County was for employment growth of around 1 percent, which turned out to be a bit too pessimistic. As of October 2012, the county had added 2,200 jobs during the prior 12 months, a growth rate of 1.7 percent. I expect that number to be revised upward to 2 percent in the coming months. That would mean by the end of 2012, we would have recovered half of the jobs lost during the Great Recession.
Since peaking at 15.0 percent late in 2009, the unemployment rate has dropped to around 10.5 percent on a seasonally adjusted basis. About half of the improvement has been due to job growth, and half due to people dropping out of the labor force.
The good news is that initial unemployment claims are back in the normal range. That means that the county economy is not generating a lot of new layoffs. It’s just that hiring, though improved, is still somewhat slow, and so long-term unemployment remains a challenge.
The Employment Security Department expects that with the end of extended unemployment benefit programs (barring action by Congress), about 2,000 to 2,500 county residents will have lost their benefits in December. There simply haven’t been enough job openings for the large number of unemployed.
The state Forecast Council is projecting slow economic and job growth for both the U.S. and the state in 2013. Gross domestic product growth is projected to be around 2 percent, roughly the same pace as in the past two years.
If that very plausible scenario holds, then Clark County’s labor market will continue to see modest improvement — job growth around 1.5 percent to 2.0 percent, and a slowly falling unemployment rate. In other words, we could expect another year of slow recovery.
No single industry stands out as having higher than average growth in the upcoming year. This year might turn out to be better than expected, but most of the risk is on the downside from factors such as the debt crisis in Europe and the push for austerity in the U.S.
Scott Bailey is the regional economist for the Washington Employment Security Department.