At mid-2015, Seattle’s boom chugs along with the attendant discontents, and the region’s key headquarters companies are doing well.
Here we are in the middle of 2015 and the biggest surprise is how placid the economy remains.
Greece’s agony seems never-ending, but the contagion hasn’t crossed the pond.
China’s slowdown, a much bigger danger, continues but dire predictions about a banking collapse and other disasters haven’t happened, yet. Nor have worries been realized about conflict in the South China Sea.
The stock market, especially the tech sector, may be in risky territory but so far the bears haven’t attacked. A correction is overdue but that doesn’t mean it will happen any time soon.
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Seattle’s boom chugs along with the attendant discontents, and the region’s key headquarters companies are doing well. Boeing came out of the Paris Air Show in good shape and prepared a calm transition to a new CEO. To emphasize the sense of normality, Bertha is still not working.
Time to head for the bomb shelter?
After all, if we were not tempered and disciplined by the 2008 collapse and the bitter Great Recession, we could be forgiven for being nervous when things seem to be going well.
In reality, the bubble and its consequences were abundantly clear for at least two years before calamity hit. A few economists and commentators warned of it. Most went along with the good times.
Now is different.
On the big stage, inflation continues to fall short of Federal Reserve targets. If anything, between the eurozone and China, we face the dangers of deflation.
The recovery, now entering its sixth year, has brought record profits to major corporations and a bull market goosed with Fed credit. But plenty of average Americans are still hurting.
Thursday’s employment report was favorable, with 223,000 jobs added in June. But don’t be fooled. According to the Hamilton Project, if that rate of job creation continued it would still be 2017 before the losses of the Great Recession were made up.
So there’s plenty of slack still in the labor market, one of the reasons that wages are stagnant.
Such is not the making of real good times, at least not yet.
The dissonances are easily seen in Washington.
For example, real median household income in 2013, the latest year available, was $60,106, better than the national average but more than $7,500 below the record set in 1999.
After a few months of elevated unemployment, the state and the national rate in May fell to 5.3 percent, and Seattle-Bellevue-Everett’s 4.1 percent would be considered by economists to be full employment. However, jobless rates continue to be much higher in most counties.
Nationally, the jobs created during the recovery tend to pay less than the ones lost in the downturn. While the tech and aerospace jobs get plenty of attention in Washington, the same trend seems to be happening here.
Food stamps are a good marker. Most households that participate in the Federal Supplemental Nutrition Assistance Program (SNAP) have at least one working member. Many are employed in low-wage jobs for prominent national fast-food and retail corporations.
For fiscal 2014, Washington had more than 1 million people getting SNAP assistance. This is double where it stood in 2004. The same trajectory is seen throughout the Northwest.
Another example of the sharp winners and losers in the recovery is lack of housing affordability in Seattle and some parts of the Eastside. It is a politically charged issue in Seattle, sure to become more so as elections are held for district representation on City Council.
Trade, one of our mainstays, is at a crossroads.
While Congress has approved fast-track authority for President Obama on the Trans-Pacific Partnership, it allowed the charter to lapse on the 80-year-old Export-Import Bank of the United States.
Details of TPP remain secret, and while the agreement might at least modestly help Washington — with plenty of downsides for other states, the consequences of killing Ex-Im are clear. Boeing will be hampered and many small exporters will be killed.
So this peculiar recovery muddles along.
Barring a shock, the biggest threat to the remainder of the year is how the Federal Reserve handles raising interest rates.
Too much, and we fall back into recession.
But so far there’s plenty to celebrate on the long weekend, even if we have a long way to go.