My name is Don Meseck, Regional Labor Economist, assigned to the Labor Market and Performance Analysis Branch (LMPA), Washington State Employment

Transcription

1 My name is Don Meseck, Regional Labor Economist, assigned to the Labor Market and Performance Analysis Branch (LMPA), Washington State Employment Security Department. I provide economic analysis services and Labor Market Information (LMI) for a seven-county area in Washington State. Some of our major clients are: WorkSource offices, the North and South Central Washington Workforce Development Councils, economic development councils, Job Corps centers, chambers of commerce, ports, public and private sector schools, rotary and Kiwanis clubs, elected officials, the media, banks, realtors, other businesses, etc. primarily in Adams, Chelan, Douglas, Grant, Kittitas, Okanogan, and Yakima counties. 1

2 This is a map illustrating the seven Central Washington counties for which I provide Labor Market Information (LMI). They are: Adams County Chelan and Douglas counties (the Wenatchee Metropolitan Statistical Area or MSA) Grant County Kittitas County Okanogan County Yakima County (the Yakima MSA) 2

3 This presentation is split into three parts: The first part, Slides 4-6, is an overview of Occupations in Demand in Washington, the data used were downloaded from the Employment Security Department s Labor Market Information (LMI) website. The second and third parts, Slides 7-24, provides an update about local economic conditions, primarily in Yakima County and in the Wenatchee MSA (Chelan and Douglas counties). Primary data sources were Local Area Unemployment Statistics (LAUS), Current Employment Statistics (CES), and Quarterly Census of Employment and Wages ( 3

4 Our agency, the Labor Market and Performance Analysis (LMPA) branch of the Washington State Employment Security Department (ESD), has a Labor Market Information (LMI) website at: An excellent 4 minute and 58 second tutorial/instructional video on this newly designed landing page is provided here: To locate ESD s Occupation in Demand (OID) list through the Learn about an Occupation (LAAO) page click on : and Download the current list. 4

5 These Top 10 Occupations in Washington State were extracted from our agency s OID list and were sorted by Estimated Employment in

6 These Top 10 Occupations in Washington State were extracted from our agency s OID list and were sorted by Long Term Growth Rates. 6

7 We now move to Part 2 of today s presentation (i.e., the Yakima County Employment Update portion). Using 21 Aug 18 LAUS data, Washington state s annual average unemployment rate declined five-tenths of a percentage point between 2016 and 2017, from 5.3 percent to 4.8 percent, indicating a significant improvement in the statewide economy. This is the lowest statewide rate in 10 years; since the 4.7 percent reading in In Yakima County, the annual average rate decreased seven-tenths of a percentage point between 2016 and 2017, from 7.5 to 6.8 percent. This is the lowest annual average unemployment rate in Yakima County since electronic records were implemented by our agency in The bottom line: average annual unemployment rates in Yakima County have declined for the past six years. Statewide the rates have declined for the past seven consecutive years ( , inclusive) - great economic news for Yakima County and Washington. 7

8 The monthly unemployment rate stabilized at 4.9 percent in the Julys of 2017 and Let s look a little deeper at the July 2018 unemployment and Civilian Labor Force (CLF) data.... 8

9 In July 2018, the number of local residents who were unemployed was 6,672 countywide, a 0.3 percent downturn from the 6,689 residents out of work in July The number of residents in the CLF grew by 1,325, a modest 1.0 percent increase. Although these were small steps in the right direction, Yakima County s unemployment rate remained at 4.9 percent in July 2017 and July The rates (4.9 percent in both July 2017 and July 2018) were the lowest readings for the month of July in Yakima County since electronic records were implemented in 1990 excellent news for the local economy. 9

10 The National Bureau of Economic Research (NBER) announced that the national recession occurred from December 2007-June But, the effects of this recession hit Yakima County s labor market primarily in 2009 and You can see that the valley of this local recession occurred in Please keep in mind that these total covered employment and wage data, include nonagricultural and agricultural employers. The pre-recession peak for total covered employment in Yakima County was 101,084 jobs in Total covered employment dipped below this level in 2009 and But, by 2011 total covered employment countywide surpassed the pre-recession peak by providing 101,249 jobs. Total covered employment rose from 99,135 in 2007 to 113,572 in 2017, a 14,437 job and 14.6 percent upturn. The number of agricultural jobs (a subset of total covered employment) increased from 22,051 in 2007 to 30,236 in 2017, an 8,185 job and 37.1 percent uptrend. In 2007 Yakima County s agricultural industry accounted for 22.2 percent of total covered employment. In 2017 agricultural employment accounted for 26.6 percent of total covered employment countywide. Hence, the agricultural share of employment rose 4.4 percentage points (from 22.2 to 26.6 percent) in Yakima County during these ten years. 10

11 This slide and the next slide ( Top 5 industries by wages in 2016 ) rank Yakima County s top industries in terms of jobs and wages provided in the 22 major industries/sectors. In 2017, QCEW data showed that Yakima County s labor market provided 113,572 jobs. Well over two-thirds (69.9 percent) of all local covered jobs were in five two-digit North American Industry Classification (NAICS) industries or sectors. (i.e., agriculture, private health services, local government, retail trade, and manufacturing). More than a quarter of all Yakima County jobs are in the agriculture, forestry, and fishing category (in which the vast majority of jobs are in agriculture). 11

12 In 2017, QCEW data showed that Yakima County s labor market provided nearly $4.36 billion in wages. Nearly 70 percent of all wage income countywide was earned in five industries: agriculture, health services, local government, manufacturing, and retail trade. 12

13 This slide compares the Top 5 industries (i.e., the sectors that provided the most jobs in Yakima County in 2017) with the wages/payrolls these sectors pumped into the local economy. In 2017 the average annual wage in Yakima County was $38,365, which was 61.8 percent of the average annual wage in Washington state of $62,077. Please note that although the agricultural industry provided 26.6 percent of all covered jobs countywide in 2017, while tallying only 21.3 percent of total covered payroll. Why? Many jobs in agriculture are seasonal. 13

14 This slide (plotting average annual nonfarm changes for the past 10 year-period in Yakima County and Washington) helps to substantiate the generalization about the Yakima County economy that: In good economic years, we lag the state; but in bad years, we lead the State. The blue bars depict over-the-year employment changes in Washington State, while the orange bars depict over-the-year employment changes in Yakima County. Note that: Washington s nonfarm economy lost jobs more rapidly than Yakima during the recession in 2009 and Why? Agriculture, and agriculturally-dependent industries (i.e., food manufacturing, fresh fruit packinghouses, trucking, etc.) has a stabilizing effect on the local labor market. In each of the past eleven years (inclusive) shown in this slide, local nonfarm job growth has lagged the growth pace statewide; with the exception of calendar year 2015 when Yakima County added nonfarm jobs at the same pace (2.9 percent) as the State. 14

15 The Yakima County nonfarm labor market added 1,600 jobs between 2016 and 2017, an average annual increase of 1.9 percent. Year over year, Yakima County s nonfarm labor market has been growing for the past 60 months (August 2013 through July 2018). The local nonfarm market provided 89,200 jobs in July 2018 versus 87,400 in the corresponding month in 2017, an 1,800 job and 2.1 percent upturn. Between 2016 and 2017, Washington's labor market provided 77,900 new nonfarm jobs, an annual average increase of 2.4 percent. In July 2018, businesses and government organizations across Washington supplied 3,445,700 nonfarm jobs (not seasonally adjusted), compared to 3,343,200 jobs in July 2017, a 3.1 percent year over year employment increase. The state s economy has posted year over year nonfarm employment increases for the past 94 consecutive months (October 2010 through July 2018). It is encouraging to note that the nonfarm job growth rate in Yakima County has been equal to, or faster than, the nonfarm job growth rate in Washington State in eight of the past nine months (November 2017 through July 2018). Only between the Julys of 2017 and 2018 did growth here in Yakima County lag the State (as shown in this slide). 15

16 We now move to Part 3 of today s presentation (i.e., the Wenatchee MSA Economic Update portion). Using 21 Aug 18 LAUS data, Washington state s annual average unemployment rate declined five-tenths of a percentage point between 2016 and 2017, from 5.3 percent to 4.8 percent, indicating a significant improvement in the statewide economy. This is the lowest statewide rate in 10 years; since the 4.7 percent reading in In Chelan County, the annual average rate decreased nine-tenths of a percentage point between 2016 and 2017, from 6.0 to 5.1 percent. This is the lowest annual average unemployment rate in Yakima County since electronic records were implemented by our agency in

17 Between the Julys of 2017 and 2018 the local unemployment rate decreased two-tenths of a point, from 3.5 to 3.3 percent. With the exception of a marginal one-tenth-point upturn between April 2017 (5.1 percent) and April 2018 (5.2 percent), the rate has either stabilized or decreased year over year for 22 consecutive months (i.e., since September 2016 through July 2018) excellent economic news. Let s look a little deeper at the July 2018 unemployment and Civilian Labor Force (CLF) data... 17

18 In July 2018 there were only 1,321 fewer residents (down 1.7 percent) in the CLF than in the corresponding month one-year prior. Fortunately, there were 231 fewer residents unemployed this July (2,503) than in July 2017 (2,734) an 8.4 percent downturn, as shown in this table. The bottom line is that the local unemployment rate tumbled to 3.3 percent this July - the lowest reading for the month of July in the Wenatchee MSA (Chelan and Douglas counties) since electronic records were implemented by our agency 28 years ago (in 1990). 18

19 The National Bureau of Economic Research (NBER) announced that the national recession occurred from December 2007-June The pre-recession peak for total covered employment in Chelan County was 39,447 jobs in The effects of this recession hit Chelan County s labor market roughly from 2008 through The valley of this local recession occurred in 2010 with total covered employment tallied only 38,179 jobs. But, by 2012 (five years later) total covered employment countywide surpassed the prerecession peak by providing 39,537 jobs. Please keep in mind that these total covered employment and wage data, include nonagricultural and agricultural employers. Total covered employment rose from 39,447 in 2007 to 43,906 in 2017, a 4,459- job and 11.3-percent upturn. The number of agricultural jobs (a subset of total covered employment) increased from 9,036 in 2007 to 10,422 in 2017, a 1,386- job and 15.3-percent uptrend. In 2007 Chelan County s agricultural industry accounted for 22.9 percent of total covered employment. In 2017 agricultural employment accounted for 23.7 percent of total covered employment countywide. Hence, the agricultural share of employment edged upwards eighttenths of a percentage point (from 22.9 to 23.7 percent) in Chelan County during this ten-year period. 19

20 This slide and the next slide ( Top 5 industries by wages in 2016 ) rank Chelan County s top industries in terms of jobs and wages provided in the 22 major industries/sectors, mentioned earlier. In 2017, QCEW data showed that Chelan County s labor market provided 43,906 jobs. Well over two-thirds (70.4 percent) of all local covered jobs were in five two-digit NAICS industries or sectors. (i.e., agriculture, health services, local government, accommodation and food services, and retail trade). Nearly a quarter of all Chelan County jobs are in the agriculture, forestry, and fishing category (in which the vast majority of jobs are in agriculture). 20

21 In 2017, QCEW data showed that Chelan County s labor market provided over $1.71 billion in wages and 67.7 percent of all wage income countywide was earned in five industries: health services, local government, agriculture, retail trade, and wholesale trade. 21

22 This slide compares the Top 5 industries (i.e., the sectors that provided the most jobs in Chelan County in 2016) with the wages/payrolls these sectors pumped into the local economy. In 2017 the average annual wage in Chelan County was $39,024, which was 62.9 percent of the average annual wage in Washington state of $62,077. Please note that although the agricultural industry provided nearly one-fourth of all covered jobs countywide in 2017, it tallied only 16.1 percent of total covered payroll. Why? Many jobs in agriculture are seasonal. In terms of payroll dollars injected into the local economy in calendar year 2017, private health services ranked 1 st in Chelan County. 22

23 The Wenatchee MSA's nonfarm labor market provided only 700 new jobs between 2016 and 2017, an average annual increase of 1.7 percent, less robust than the 2.4 percent growth rate statewide during An economic event which negatively impacted the local labor market was the idling of Alcoa s aluminum smelter in Malaga, and the subsequent layoff of over 400 workers, in January The Wenatchee MSA is still rebounding from this event. Hence we see the relatively less robust nonfarm job growth rates for this area in calendar years 2016 and 2017 versus 2014 and

24 The Wenatchee Metropolitan Statistical Area (MSA) nonfarm labor market added 700 jobs between 2016 and 2017, an average annual increase of 1.7 percent. Total nonfarm employment in the Wenatchee MSA has increased or stabilized, year over year, in each of the past 75 months (May 2012 through July 2018). Between 2016 and 2017, Washington's labor market provided 77,900 new nonfarm jobs, an annual average increase of 2.4 percent. In July 2018, businesses and government organizations across Washington supplied 3,445,700 nonfarm jobs (not seasonally adjusted), compared to 3,343,200 jobs in July 2017, a 3.1 percent year over year employment increase. The state s economy has posted year over year nonfarm employment increases for the past 94 consecutive months (October 2010 through July 2018). It is encouraging to note that the nonfarm job growth rate in the Wenatchee MSA has been faster than the nonfarm job growth rate in Washington State in each of the past nine months (November 2017 through July 2018). Hence, one could say that if these growth trends continue, the Wenatchee MSA s nonfarm economy could well expand more rapidly than Washington s nonfarm economy in At the least, estimates indicate that the local job market is certainly off to a strong start in the first seven months of this year. 24

25 (Self explanatory) 25

26 Would like to express my appreciation to Angela Durbin (Deputy Director, Washington Economic Development Association or WEDA) and to Noah Reandeau, Executive Director, WEDA) for asking me to conduct this presentation and for providing outstanding logistical support. Are there any questions? 26