Glimmers of Hope?

The Sunday Seattle Times offers a page full of graphs to support a rather grim view of the state’s economic future. But that pessimistic view isn’t necessarily supported by the graphs on the page. Economics is all about trends, and if you look at the trendlines over the past year, conditions look substantially brighter. We are clearly beginning to emerge from that deep hole in which the financial crisis buried us.

1. Leading economic indicators for Washington have climbed to 116.3 by September, up solidly from 110.3 a year ago, suggesting we should expect slow but steady economic growth ahead.
2. There are 4.27 online adds for every 100 workers in our labor force. That’s up about 30% from 3.26 jobs per 100 workers a year ago. Maybe not enough to quickly bring down state unemployment which remains stubbornly high at 9 percent. But unemployment in the state is significantly lower than that national rate of 9.6%. And the jobs available are much higher than the 2.79 average for the nation as a whole.
3. Boeing employment has been on a steady climb since hitting a bottom in May. Recent increases are small, but with the new 787 beginning delivery in the first quarter of 2011 and the 747-8 soon afterward, hiring should start to pick up.
4. The purchasing managers’ index is 59.2, up solidly from 52.6 a year ago, and substantially higher than 54.4 for the nation as a whole..
5. Retail sales showed a year-to-year gain of 4.2% compared to a 6% decline the year before.
6. Cargo volumes at the Port of Seattle were up about 20 percent.

The stubbornly persistent bad news is in housinig, where sales are down and inventories remain high. Housing problems are likely to plague us for a long time. But even here there is a glimmer of hope. Net new drivers licenses granted, which tends to be a good proxy for migration into the state, shot up to 12,100 in September, nearly twice the level of last September. New arrivals in the state help to create new demand for all that excess housing we built during the boom years.