Why no one believes the unemployment estimate in Spokane

A few days ago, the State of Washington released the latest unemployment estimates and unemployment in Spokane is reported to have gone down. Which should be a positive report.

For many, though, a falling unemployment rate does not seem real. Here’s why – as shown in a chart of Spokane’s employed non-farm workforce versus population. As you can see, the overall population has been increasing while the number employed has been falling recently and is mostly steady over the past decade.

The State estimates unemployment by estimating the number of people working and the number of people wanting to work, versus the number not currently employed. The unemployment rate is considered to go down if more people choose not to work, even though fewer people might be working.

Thus, a lower unemployment rate – which seems like good news – can also be bad news. When unemployment drops because fewer people are looking for work (given up?) rather than an increase in jobs, it means that society is less productive.

For this chart, the 2010 population for Spokane County is estimated as 2009 plus the amount of increase from 2008 to 2009. That’s a crude estimate of course, but likely close enough. The number of employed comes from the US Bureau of Labor Statistics and is the same data also available at Workforceexplorer.com.

While the official unemployment rate is down, a smaller percent of the population in Spokane County is working at jobs showing up in the official tally. (The chart uses the official data for non-farm jobs from which the government also excludes active duty military, self employed and some others.)

I wonder why the population is increasing but the job totals are not increasing. I worry that this is not “good news”.


One Response to Why no one believes the unemployment estimate in Spokane

  1. Pingback: Spokane’s “The Union Credit Union” Closed by Regulators « Spokane Economic And Demographic Data

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