By Donald Meseck, Employment Security’s labor economist for Yakima, Kittitas, Grant, Douglas, Chelan, Adams and Okanogan counties
Each month, the Employment Security Department releases statewide and county employment and unemployment data for the previous month. Find more labor-market data and analysis on the Employment Security website.
This report provides an update on the Wenatchee Metropolitan Statistical Area (Chelan and Douglas counties) economy incorporating not seasonally adjusted, nonfarm employment and civilian labor force data. Analysis focuses on year-over-year (between May 2014 and May 2015) and average annual (between 2013 and 2014) changes in the labor market.
Preliminary labor force data show that Washington state’s average annual not seasonally adjusted unemployment rate decreased eight-tenths of a percentage point between 2013 and 2014, from 7.0 percent to 6.2 percent. Between the Mays of 2014 and 2015 the rate declined seven-tenths of a point, from 6.0 to 5.3 percent.
In Chelan and Douglas counties, the annual average unemployment rate fell from 7.5 to 6.6 percent between 2013 and 2014, a nine-tenths percentage point drop. The rate decreased one and two-tenths percentage points this May to 6.2 percent from the 7.4 percent reading in May 2014 (see Figure 1) as the number of unemployed residents contracted and the labor force expanded (see Figure 3).
Total nonfarm employment
Between 2013 and 2014, Washington’s labor market provided 82,900 new nonfarm jobs, an annual average increase of 2.8 percent. This May, businesses and government organizations across Washington supplied 3,179,000 nonfarm jobs (not seasonally adjusted), compared to 3,067,500 jobs in May 2014, a 3.6 percent year-over-year employment increase. The state’s economy has posted nonfarm employment increases for the past 56 consecutive months (October 2010 through May 2015).
The nonfarm labor market in Chelan and Douglas counties provided 1,200 new jobs between 2013 and 2014, an average annual increase of 3.2 percent, slightly more robust than the 2.8 percent growth rate statewide during 2014. In May 2015 local nonfarm employment averaged 41,900 jobs which was a strong 1,700 job and 4.2 percent expansion from the 40,200 recorded in May 2014 (see Figure 2). The two-county area has registered year-over-year employment increases for the past 36 months (from June 2012 through May 2015).
Employment and unemployment
Washington’s Civilian Labor Force (CLF) expanded by 28,140 residents (a 0.8 percent upturn) from 2013 to 2014. The state’s labor force has increased for the past 16 months (February 2014 through May 2015). Between the Mays of 2014 and 2015 the state’s labor force grew by 2.1 percent. This May, Washington’s CLF tallied 3,545,440 residents versus 3,472,300 in May 2014 equating to 73,140 more Washingtonians in the labor force.
The CLF in Chelan and Douglas counties grew from 59,120 residents in 2013 to 60,240 in 2014, meaning that 1,120 more residents in the two-county area were in the labor force, an advance of 1.9 percent. The uptrend continues. The labor force has been expanding for the past 14 consecutive months (from April 2014 through May 2014). Most recently, between the Mays of 2014 and 2015, the CLF increased 3.2 percent, from 56,710 to 58,540 (up 1,830 residents). Simultaneously, the number of unemployed fell by 610, from 4,220 to 3,610 between the Mays of 2014 and 2015. Hence the Chelan and Douglas county area’s monthly unemployment rate fell from 7.4 to 6.2 percent during this timeframe (see Figure 3).
Nonfarm industry employment
Not seasonally adjusted estimates indicate that nonfarm employment in Chelan and Douglas counties rose to 41,900 in May 2015 from the 40,200 jobs tallied in May 2014, a 1,700 job and 4.2 percent increase, greater than Washington’s 3.6 percent job growth rate during this period. Highlights of year-over-year changes follow (as shown in Figure 3):
- Mining, logging and construction employment in the two-county area provided 2,000 jobs in May 2014 and 2,600 jobs in May 2015, a dramatic 30.0 percent and 600 job increase. Most jobs in the local “mining, logging and construction” category are in construction. Year over year, construction employment has grown in the two-county area for the past 14 months (from April 2014 through May 2015). This robust construction job growth in Chelan and Douglas counties between the Mays of 2014 and 2015 was accompanied by rising home and condo sales during this timeframe. According to the June 2015 “Real Estate Snapshot” newsletter published by Pacific Appraisal Associates, in the Wenatchee area market (i.e., in Wenatchee, Malaga, East Wenatchee, Orondo and Rock Island), the number of homes and condos sold in the first five months of 2015 was 355, a 18.7 percent gain over the 299 sold from January through May 2014. The dollar volume of these homes and condominiums sold also increased; from $75.2 million during the first five months of 2014 to $93.5 million during the first five months of this year, a 24.2 percent upturn. The median home price in the Wenatchee market rose from $222,000 during first five months of 2014 to $242,000 during January through May of this year. Statewide, construction has been adding workers for the past 39 months (from March 2012 through May 2015).
- Estimates indicate that trade, transportation, warehousing and utilities gained 500 jobs between the Mays of 2014 (9,000 jobs) and 2015 (9,500 jobs), a 5.6 percent upturn. Roughly 40 percent of this gain was in retail trade, which moved upward from 5,600 to 5,800 jobs, a 200 job and 3.6 percent upturn.
- Private education and health services increased by 300 jobs, up 4.5 percent, between the Mays of 2014 and 2015. The private education and health services industry has now added jobs for 25 months (from May 2013 through May 2015). Last year, this industry averaged 300 new jobs rising 4.7 percent from 6,400 jobs in 2013 to 6,700 in 2014. Statewide, this industry has grown for at least the past 89 months (from January 2008 through May 2015).
- Between the Mays of 2014 and 2015 leisure and hospitality (primarily hotels and restaurants) jumped from 5,500 to 6,000 jobs, an appreciable 500 job and 9.1 percent upturn. This industry has been adding jobs across Chelan and Douglas counties for the past 20 months (from October 2013 through May 2015). Although Washington’s leisure and hospitality industry has been posting year-over-year growth for a longer period of time (i.e., expanding for the past 56 months) the job growth rate has been faster in the two-county area for the past 14 months (i.e., from April 2014 through May 2015), one indication that tourism is alive and well in Chelan and Douglas counties.
- State government was the only major industry to lose jobs over the year in Chelan and Douglas counties. Specifically, between May 2014 and May 2015 state government employment contracted from 1,300 jobs to 1,200, a 7.7 percent downturn.
On April 17, 2015, Gov. Jay Inslee declared 13 more Washington state river basins in drought, according to the Department of Ecology’s website. This brought the total number of river basins in Washington in drought emergencies to 24 (of the state’s 62 watersheds) and qualified these 13 Water Resource Inventory Areas (WRIAs) for drought relief funds. One of the watersheds added to the list on April 17 was identified as: WIRA 40 – Alkali-Squilchuck (Kittitas, Benton, Chelan and Yakima counties).
On May 15, 2015 the Governor declared a statewide drought as snowpack shrank to historic lows, river flow began to dwindle and irrigation districts started cutting off water to some farmers.
“We’re really starting to feel the pain from this snowpack drought,” Inslee said. “Impacts are already severe in several areas of the state. Difficult decisions are being made about what crops get priority water and how best to save fish.”
The Washington Department of Agriculture is projecting a $1.2 billion crop loss this year as a result of the drought. As things continue to dry out, the Department of Natural Resources expects more early-season and higher-elevation wildfires.
“This drought is unlike any we’ve ever experienced,” said Washington Department of Ecology Director Maia Bellon. “Rain amounts have been normal but snow has been scarce. And we’re watching what little snow we have quickly disappear.”