Clark County maintained a steady pace of job growth through the 12 months ending in August, a new report issued by the state showed Tuesday, adding 3,100 jobs across all but one employment sector and posting a healthy annualized growth rate of 2.4 percent.
The county’s economic performance in August was nearly identical to its over-the-year job growth in July, when it added 3,200 jobs and posted an annualized growth rate of 2.5 percent, according to Scott Bailey, regional labor economist for the Washington state Employment Security Department.
Clark County’s recovery is “puttering right along,” Bailey said in a phone interview Tuesday.
Meanwhile, the county posted a preliminary jobless rate of 8.3 percent in August. That’s down from 11.1 percent unemployment in August 2012.
But it’s not entirely clear whether the county’s jobless rate, an important indicator of economic health, is improving for the right reason — because people are getting jobs — or for the wrong reason: because people are dropping out of the labor force.
The official unemployment rate counts only those workers who are actively seeking work. So if you drop out of the work force, you’re no longer counted in the official jobless rate.
Clark County’s labor force participation rate was 64.4 percent in 2012, according to U.S. Census Bureau estimates. That’s down from 68.3 percent in 2008.
Part of that drop “was due to retirements, but mostly to the bad economy,” Bailey wrote in his “Southwest Washington Labor Market News” report.
However, Bailey said Tuesday that “the wave of people leaving the labor force is pretty close to coming to an end, because we’ve had solid job growth for over a year.” And that means the labor force participation rate will “start slowly climbing,” he said.
Still, that doesn’t necessarily mean the county’s unemployment rate will plummet.
Movement in the jobless rate will depend, in part, on how many sidelined workers jump back into the labor market and whether the rate of their return outpaces the rate of job growth. “The unemployment rate is really not going to be a good indicator of what’s happening with the economy for some time to come,” Bailey said.
‘Hot’ construction sector
The county’s year-over-year net employment growth of 3,100 jobs through August occurred across both private and public sectors. Out of all 10 sectors, including construction, manufacturing, trade, professional and business services and government, only one saw its payroll shrink: education and health services, down 700 jobs.
In his report Tuesday, Bailey described three sectors as “hot:” construction, which added 700 jobs over the year; professional and business services, which fattened payrolls by 1,000 jobs over the year; and “other services” — everything from auto mechanics to tanning salons — which chipped in 300 jobs over the year. Bailey said the construction sector’s growth has been “going on for a while,” driven by a surge in apartment building.
The net increase in hiring by employers translates to an annualized growth rate of 2.4 percent. In better times, Clark County’s annual growth rate typically clocks in at 2.5 to 3 percent.
By contrast, the Portland metro area posted an annual employment growth rate of 2.7 percent in August, while Washington and Oregon experienced growth rates of 2.3 percent and 1.8 percent, respectively.
Clark County’s preliminary unemployment rate in August — 8.3 percent — is likely to be revised upward to above 9 percent. The revision will take in account those unemployed county residents who previously worked in Oregon. A similar modification drove up July’s initial jobless rate of 8.6 percent to 9.7 percent.
After the financial crisis first hit in 2008, Clark County’s unemployment rate reached its highest level in March 2010: 15.9 percent.
Another bright spot in the county’s economy: “After trending upward four months in a row,” according to Bailey, initial claims filed for jobless insurance under Washington state’s system “dropped like a rock to a seasonally-adjusted 1,520, the lowest since 1999.”
Bailey said the decrease in initial jobless insurance claims means “we’re generating (a) very low number of job losses, knock on wood.”
Although the county’s economy continues to improve, not everyone who wants full-time work is finding an open door. The underemployment rate is a broader measure of labor market inertia that includes involuntary part-time workers (those who want full-time work but can’t find it) and those who’ve given up looking for work but who still want a job.
The U.S. underemployment rate was 13.7 percent in August, according to Bailey’s report. In August 2012, it was 14.7 percent.
Previously, Bailey has said that because Clark County’s jobless rate has been higher than the nation’s, the county’s underemployment rate is in at least the high teens.