Spokane Airport passenger traffic update

Update: The May 2011 numbers are available and its worse than expected.

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As of April 2011, passenger counts are running almost the same as 2010, suggesting 2011 will remain similar to or below 1996 passenger levels.

Airport passenger counts are a proxy indicator of the local economy. This suggests that Spokane’s economy is still stuck.

Felts Field air traffic has fallen a sharp 18.34% since a year earlier. Possibly due to the high cost of fuel – and (update) bad weather. (Update – if due to bad weather, we should see improvements in July and August. If we do not, then the problem lies elsewhere. Traffic was also down for May 2011.)

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More retail vacancies open in the Spokane Valley

Last week:

“Perkins has two restaurants in Spokane, one in Spokane Valley and one in Coeur d’Alene, all locally owned. None of those will close.

Owner Nancy McDaniel said the local Perkins will accept job applications from displaced Marie Callender employees as the restaurants staff up for summer.

One week later:

Citing a difficult economy McDaniel stated, “the franchise agreement for this location expired and a decision was made that it was not financially feasible to renew the franchise at this location.  This will allow us to focus our resources on other locations in the nearby area.”  Employees of the restaurant, one full time manager and 13 part time employees were notified of the closure during a meeting at the end of their shift earlier in the day.

 

Caterpillar Announces New Parts Distribution Center in Spokane

When operational in 2012 and dependent on market demand, the Spokane Distribution Center is expected to employ 100 to 150 people.

via Caterpillar Announces New Parts Distribution Center in Spokane, Washington – MarketWatch.

This grows the trucking and warehouse distribution cluster in Spokane.

The above is a news story, not a data story – so here is the impact it will have on the data.

More jobs is good but local politicians are piling on top congratulating themselves on this without thinking through the consequences: adding more low wage, low skill jobs will reduce the local median income, increasing Spokane’s wage disparity with the rest of the state by even more. Bummer.

Caterpillar says they will be paying non-union local market wages, which appear to be about $9 to $11/hour.

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Spokane Median Income Growth Rate

Newly updated.

The next chart shows Spokane’s median income  versus the median income for the state of Washington through 2010. Spokane median income runs about 80% of that at the State level and has fallen further and further behind since the 1970s. Specifically,the statewide median incomes grows 2 times faster than the median income in Spokane.

Washington State now ranks 8th in the nation for wage income growth, which apparently comes mostly from the west side of the state – where unemployment went down, unlike in Spokane where May unemployment became worse.

As shown below, Spokane has unfortunately been diverging further and further from the State’s median income.

The data comes from the Office of Financial Management.

As shown previously, transfer payments income into Spokane has gone up – sharply – although, per the previous article, nationally, transfer income has fallen in the first quarter of 2011. First quarter data is not available for Spokane.

Data comes from washington.reaproject.org

Note that transfer payments historically rise at the start of recessions. See 1973-1974, the early 80s, and then early 90s.  Note how each time, the transfer payments dropped as the recession faded away.

Now look at 2001 – they never dropped afterwards here in Spokane. Then look at 2008 onwards. Will this drop when this recession recedes? With the loss of much industry here, I suspect many took involuntary early retirement (retirement benefits can be a source of transfer payments).  This may be a semi-permanent upwards spike, as in 2001, from which the Spokane economy does not readily improve.

Spokane moves up in the national rankings

Spokane has the fourth-highest car theft rate in the country

via Spokane, Yakima are U.S. auto theft hot spots | Puget Sound Business Journal.

Was at #35 in 2008, #18 in 2009 and now #4 in 2010.

Think the local news will cover this? Nah. This is from the Puget Sound Business Journal. Spokane will stick with happy talk news.

Correction and Update: Several local news outlets have reported this.

KXLY says that auto insurance rates will likely go up for Spokane area residents as a consequence. Due to budget cutbacks, the State Patrol is closing its auto theft investigation unit. Party on dudes!

Here is a graphic and data table from the NICB Report.

2010 Ranking 2009 Ranking
1.  Fresno, Calif. 5
2.  Modesto, Calif. 2
3.  Bakersfield-Delano, Calif. 3
4.  Spokane, Wash. 18
5.  Vallejo-Fairfield, Calif. 16
6.  Sacramento/Arden-Arcade/Roseville, Calif. 11
7.  Stockton, Calif. 4
8.  Visalia-Porterville, Calif. 8
9.  San Francisco/Oakland/Fremont, Calif. 7
10. Yakima, Wash. 6

The above supports my evolving view that Spokane’s economic situation is extremely bad. Not because of the auto theft rate, per se, but because of where it falls in the list, surrounded by devastated California cities. This suggests the economic climate here is on par with some of the worse in the nation, particularly in California’s Central Valley region, which was gutted by the housing meltdown.

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Health care now the number one employer in Spokane

Government is no longer the largest employer – health care is:

Here is the same chart, but rotated vertically, since our eyes and brain process relative sizes better vertically than horizontally. Due to scaling – the horizontal chart would not fit at full size – the vertical dimension below is larger, but that is the actual chart size.

  1. Healthcare
  2. Government
  3. Retail
  4. Hotels and restaurants
  5. Manufacturing

And after Manufacturing, the categories fall in to the noise level.

This is not a sustainable trajectory. I was just looking at billing data for some procedures at hospitals outside Spokane.

  • $6,600 – Doctor’s surgery fee for 2 1/2 hour surgery that is normally an outpatient procedure
  • $40,700 – Overnight hospital stay (routine), agreed to a $14,000 payment from the insurance company
  • $12,000 – 45 minute outpatient tonsillectomy procedure
  • $24,000 – 45 minute outpatient bunionectomy

Most of the above do not represent the total set of fees associated with the service.

The more we grow health care locally, the less money we have available for productive business pursuits.  The health care pricing trajectory is not sustainable and will eventually consume the entire country if continued.

Spokane Unemployment and Employment Data for May 2011

The number of non-farm workers is at 2004 levels. May and June are historically peaks in employment, with a 2nd peak sometimes occurring around Christmas. Unlike 2005-2010, when employment rose from April to May, this year, employment went down. This suggests worsening employment numbers until late Fall of 2011.

Unemployment (not seasonally adjusted) goes up to 9.0% (and will be blamed, of course, on too many people looking for work). This is only the 2nd time since 2000 that unemployment went up from April to May – and the other time was in 2009.

Some bright spots – initial unemployment claims are down, suggesting fewer layoffs. Continuing unemployment claims are also down, but that is influenced by unemployed workers that have exhausted their benefits and are no longer eligible for unemployment checks (see last chart, below).