Technology Sector Masks High Seattle Unemployment: Seattle Market Review, September 2012

Seattle unemployment higher than rest of nationAfter a jaw-dropping drubbing at the first presidential debate, the Obama administration dug deep for some good news and came up with a drop in the unemployment rate, to 7.8%. Seattle Media Maven remains unconvinced and eagerly awaits the adjusted figures, likely to be released sometime after November 6th. According the Labor Department, about 15% of the workforce remains unemployed or is under-employed in part-time positions because they can’t find full-time work.

Many are turning to part-time work for lack of full-time jobs

No salad days for recent college graduates

Indeed, most of the drop in unemployment can be attributed to part-time employment, including an influx of college graduates unable to find even entry-level jobs in the career of their choice, and early seasonal  and very temporary retail hiring.

The Wall Street Journal reports that more than 1 in 5 working-age men – about 14 million ages 25-54 – lack full-time work. And then there is the conservative estimate that five million more long-term unemployed (who no longer are counted among the unemployed ranks because they have quit looking) are sitting on the sidelines still hoping to be called back into the game. Add to that the looming and potentially disastrous fiscal cliff at the end of the year and a ship-load of pressing crises at home and abroad, and it is enough to send you running for economic cover.

The better news is that Seattle, at least the city if not the metro area, is faring better than the rest of the nation in a number of areas.

Thank Goodness for Technology

Thanks to an abundance of tech firms, the Seattle market skirts, or masks, some of the languishing 25-54 workforce woes by employing lots of Gen Y workers, ages 18-29. This group has enjoyed strong wage growth recently, garnering the title from PayScale, Inc. as Best Metro Area for Gen Y Workers, beating out Houston and Minneapolis. Directly tied to that, Seattle ranked 4th for wage growth YOY July at 2.9%, bested by San Francisco (3.5%), Houston (3.2%) and Denver (3.0%). Add to that, the quality-of-life rating the University of Washington as 8th in the nation for improving social mobility, producing research and promoting social service. The ranking joins a seemingly never-ending flow of lifestyle, education, culture, entertainment, and natural-resources accolades including the Business Week rating of Seattle as the 2nd among the 50 Best Cities in the nation, topped again by San Francisco.

Before you envelop yourself in a big bear hug of giddiness, not all is good news in the greater Seattle area. Our retail sector lost 4,300 jobs in the past 5 years and the tech sector still is in flux. Washington state and Seattle unemployment remains higher than the nation, and continues headed in the wrong direction. Even with the resulting consumer confidence uptick based on the announced lower national unemployment rates, confidence remains exceptionally low. Seattle Media Maven suspects some seasonal euphoria is at work. That is not totally a bad thing; big ticket items, such as vehicles have been faring relatively well recently, especially luxury models. Luxury retailers continue to open stores in the area as do ever optimistic restaurateurs and hoteliers. The market still is enjoying the influx and expansion of major beverage retailers such as BevMo! and Total Wine and More, among others. Even Bellevue’s Lincoln Square, once left for dead, has been resuscitated and hopes to restart construction in the Spring of 2013. But the market won’t thrive on high-tech and luxury spending alone.

Light at the End of the Tunnel

The Seattle Market Review  has a long list of new commercial, big-parcel buys and apartment-construction projects in the works; something that has been going strong, especially in the South Lake Union and University District area, for the past year. While all this action takes place topside, the underground railroad known as Seattle Light Rail, continues to bore through the city, eventually linking the University District to Roosevelt and Northgate, as well as Capitol Hill, downtown Seattle, South Seattle, Tukwila and SeaTac. On the Eastside, closing of the rail corridor deal will provide a 20-mile link between Renton, Bellevue, Kirkland and Woodinville. Tacoma residents finally celebrated the opening of the Sounder commuter-rail service to South Tacoma and Lakewood. Good thing, too, as gas prices continue to be a worry, nudging area inflation higher.

Look! Up in the Seattle Sky…

SeaTac International Airport traffic was up nearly two percent, besting last year’s record-setting pace, with more than 19 million passengers using its facilities this year through July 31st. In other airy news, Alaska Airlines added a route to San Antonio and Boeing added a third 787 manufacturing line in Everett. And finally, from out in the seas, cruise industry expenditures place Washington 6th nationally. The industry report estimates the cruise sector accounts for nearly 18,000 jobs and $861 million in wages and $707 million in direct spending. More than 434,000 travelers said “bon voyage!” from the nation’s 7th busiest cruise port last year. Another industry keeping Seattle afloat is trade, which was up 11% in 2011. Top export destinations include China, Canada, Japan, Hong Kong and the United Arab Emirates.

Real Estate Woes Lifting

Even with nearly 4 in 10 Seattle homeowners underwater on their mortgages, King County saw the best August in five years, wrapping the fourth straight month of 2,000 or more home sales. On the commercial side, office towers are selling at record prices, apartment development is better than we have seen in decades, the inventory of foreclosures is down 18%, and short sales are drying up. With inventories of new homes at record lows, one area poised for better times is residential construction.

Political and Holiday Spending Boost Media Economy Through Year End

As noted in this previous Seattle Media Maven blog entry, it is difficult to look beyond the current infusion of political dollars from a now real presidential race, a highly contested gubernatorial race, and some high-stakes initiatives to what lies ahead. How can one argue when holiday retailers are lined up to fill the political advertising void? Our somewhat shielded market, and nation for that matter, doesn’t fully grasp what lies ahead, regardless of who wins the election.

The U.S. is headed toward a fiscal cliff come December 31stEither we correct, or we don’t and both options are going to be tough on the consumer

Still, based on the four-year righting of personal debt after the initial recession shock, forecasters predict that consumer spending will be up this holiday season. By year end, both Deloitte and ZenithOptimedia predict a YOY lift of about 4% and Veronis Suhler Stevenson predicts spending will be up 5.9% (mostly based on a political – especially full-rated PAC – spending boost). But Zenith smartly notes, “Key economic indicators that increased in 2011 have decelerated, including consumer spending and job growth.” Seattle Media Maven cautions: Enjoy it while it lasts; those who indulge in the champagne dreams of a recovery based on the political and holiday season, will be greeted with a sobering new-year hangover… and advertisers pressing even harder, rightfully, for a solid ROI.

__________________________

Get the latest Seattle market and local economic news in the September 2012 Seattle Market Review. Or better yet, sign up for a free subscription by emailing SMR’s master curator, Steve Fuller at sfuller@seattletimes.com.

♦ ♦ ♦ ♦ ♦ ♦

Seattle Media Maven is open to your suggestions for content and always welcomes tips, feedback, questions – whatever is on your mind about the Seattle market and the media that serve it! Use the Comments box below or email us at seattlemediamaven@seattletimes.com.
Be Sociable, Share!

There are no comments yet. Be the first and leave a response!

Leave a Reply

Wanting to leave an <em>phasis on your comment?

 

Trackback URL http://www.seattlemediamaven.com/2012/10/17/technology-sector-masks-high-seattle-unemployment-seattle-market-review-september-2012/trackback/