by Kevin Schofield
The “long read” this weekend is from the Washington State Economic and Revenue Forecast Council report last week about how the economic recovery is developing at the national and local levels. In short: “It’s complicated.”
There is no metric that gives us a perfect picture of the economy; it is a very multifaceted being. Economists often start with a look at industrial production, employment, and consumer confidence, and the report definitely does them, but it also offers interesting, insightful graphs on several other metrics, including personal income, home prices, oil prices, and inflation.
At the national level, employment is falling, with 559,000 net jobs added in May. There are some interesting tradeoffs within that number, however; For example, while food and drink employment increased by 186,000, food and beverage employment decreased by 26,000 – representing our shift to more eating out and less home cooking as the COVID-19 pandemic begins to fade. In Washington State, we created more than 29,000 jobs in March and April, and unemployment is stable at 5.5%; However, this is overshadowed by the ongoing downsizing at Boeing: The company has cut around 19,300 jobs in the aerospace industry since the beginning of 2020, and another 9,800 are to be laid off by the end of this year.
At the same time, national consumer confidence has recently fallen, reflecting both economic concerns and concerns about rising inflation, the Council believes.
Housing construction is slowing across the country, but Washington is an exception, with 63,700 new housing units approved in the first quarter of 2021, the highest since 1978.
Inflation is another place where Washington, and the Seattle area in particular, seem to be on a different path than the country as a whole. While the average inflation for US cities in the 12 months to April was 4.2%, it was only 3.4% in Seattle. The higher inflation is apparently being driven by higher energy costs. Surprisingly, housing cost inflation is on the low end: 2.1% nationally and only 1.6% in Seattle.
The report contains pages with fairly easy-to-read charts of various economic measures. Particularly noteworthy: It looks like the number of Washington tenants who are in arrears with their rent payments is rising again after the relief of the CARES bill earlier this year lowered them.