Bill Virgin, April 19, 2015, The News Tribune
The recession officially ended in June 2009, according to the National Bureau of Economic Research.
Economists are not known for their senses of humor, but even by that low standard that was a cruel joke to tell the American people who continued to lose jobs, income and savings, houses and a willingness to believe anything experts were saying. The number of houses papered with foreclosure notices, the WARN notices issued and the pile of bank failures constituted stark evidence that, whatever the technical definition of a recession’s end, in the real world it was still rolling.
But with the release of the latest monthly jobs report for Washington, it’s useful to delve into the numbers and try to peg, in a more reality-based sense, when the recession actually did end.
What we find is sometime last year. And in some places, not yet.
That seems late. Hasn’t the economy been growing? Yes it has been. Isn’t unemployment down? Again, yes.
To judge from the considerable noise, emanating mainly from that city up north, the recession has not only been left in the dust but the economy is roaring down the highway toward a glorious, even slightly fevered, future —although this metaphor doesn’t work around here since there’s rarely such a thing as an open road.
Tech companies are grabbing employees and real estate at a frenetic pace. The residential housing market has recovered to the point that sellers of even nice but hardly opulent properties can require would-be buyers to submit bids by a specified deadline; those bids sometimes include not just a dollar figure but essays and presentations on why the bidders should be picked.
There’s a danger, though, in extrapolating the conditions and anecdotes from one region to the state, even when that one region constitutes such an outsized portion of the state’s economy. In last month’s report nearly a dozen counties had jobless rates of more than 10 percent. Even Pierce County, in the theoretically thriving Puget Sound region, unemployment was at 7.7 percent, hardly the picture of robustness.
Still, that’s growth, so why not acknowledge the recession is ancient history. To make the case that the recession is very recent history, and for some areas of the state isn’t even history yet, we’ll make two arguments.
Argument No. 1 is in definition. If a recession’s end is marked by the strict terms of quarterly economic growth, fine, June 2009 it is. But even NBER, the official rulemaking body of determining a recession’s length, says its call of economic turning points is a matter of judgment, incorporating multiple factors and indicators.
Fine. Let’s define a recession as not just a return to statistical growth but making up ground lost in the downturn.
By that definition, Washington’s prior economic peak came in July 2008, with total employment of 3,317,870 (for an unemployment rate of 5.2 percent). The trough was in January 2011, when employment hit 3,106,720, with an unemployment rate of 10.4 percent (there were three months in 2010 with higher unemployment rates, because of a large civilian labor force on which that percentage was calculated).
When did the state’s economy recover to more than 3.3 million in employment? Try July 2014.
Argument No. 2 has to do with the limitations of referring to one distinct recession. Downturns have multiple components and causes; they don’t affect regions or industries uniformly. Aerospace, tech and ag, all important to Washington, did OK in the recession. Housing, and related sectors such as forest products, got clobbered. Some industries, such as retail and media, were going through massive upheavals (mainly Internet driven) before the recession started and after it ended.
For some workers and industries, a recession is just now hitting home because of the peculiar and specific circumstances of their employers — or former employers.
In Shelton, for example, an Oregon company has bought Olympic Panel Products, a plywood mill employing 185 hourly and 30 salaried workers. The buyer plans to relocate operations to a new mill in Oregon to open in 2016. Whether those workers move to Oregon or are left behind, those are jobs lost from that community and the state.
Up in the Snohomish County community of Arlington, MicroGreen Polymers, a green-tech company, abruptly closed its doors; as recently as January the company reported 146 employees.
Maybe employees of those companies will find replacement jobs quickly, and if so maybe you’ll be able to convince them that the recovery is real. But with a lot of other folks, making the case to them that the recession is long ago and far away will be a tougher sell.