Wenatchee MSA (Chelan and Douglas Counties) Labor Area Summary July 2022

Overview

This report provides an update on the Wenatchee Metropolitan Statistical Area (MSA) economy using not

seasonally adjusted, nonfarm employment and civilian labor force data. Analysis focuses on year over year

(July 2021 and July 2022) and average annual data changes (between 2020 and 2021).

Unemployment rates

Civilian Labor Force (CLF) data show that Washington’s not seasonally adjusted average annual

unemployment rate fell from 8.5 percent in 2020 to 5.2 percent in 2021. Between July 2021 and July 2022,

the rate dropped from 5.3 to 3.6 percent. This 3.6 percent reading is the lowest rate for the month of July in

Washington since state data began to be recorded electronically in 1976.

In the Wenatchee MSA, the average annual unemployment rate fell from 8.2 percent to 5.4 percent between

2020 and 2021. Year over year, rates have declined from April 2021 through July 2022. The July 2022 rate of

3.1 percent (Figure 1) is the lowest July reading since county data began to be recorded electronically in 1990.

Total nonfarm employment

Between 2020 and 2021, estimates indicate that Washington’s labor market provided 81,100 more nonfarm

jobs, an average annual increase of 2.5 percent. Year over year, Washington's nonfarm market has expanded

in each of the past 16 months (April 2021 through July 2022). This July, business and government

organizations statewide tallied 3,555,100 jobs (not seasonally adjusted) compared with 3,393,400 in July

2021, up by 161,700 jobs and 4.8 percent.

The Wenatchee MSA’s economy added 2,300 jobs during 2021, a 5.3 percent upturn, more robust than

Washington’s 2.5 percent growth rate between 2020 and 2021. Year over year, the Wenatchee MSA's

nonfarm market contracted for 12 months (April 2020 through March 2021) prior to employment increases

during the past 16 months (April 2021 through July 2022), as shown in Figure 4. This July, total nonfarm

employment netted 1,500 more jobs than the 47,300 jobs tallied in July 2021 (Figures 2 and 3), a 3.2 percent

increase. In fact, the two-county Wenatchee MSA economy provided 800 more nonfarm jobs (up 1.7

percent) in July 2022 (48,800 jobs) than in June 2019 (48,000 jobs), an indication that the local nonfarm

market has rebounded to levels above the pre-COVID era.

Figure 2. Wenatchee MSA nonfarm industry employment, not seasonally adjusted, in thousands

Washington state, January 2019 through July 2022

Source: Employment Security Department/DATA; Current Employment Statistics (CES)

Nonfarm employment in the Wenatchee MSA increased by 3.2 percent between July 2021 and July 2022.

Employment and unemployment

Washington’s Civilian Labor Force (CLF) edged downward by 15,964 residents (a -0.4 percent downturn)

between 2020 and 2021. This labor force contraction occurred in the first half of 2021. Since then, the

state’s CLF has either stabilized or expanded, year over year, for 13 months (July 2021 through July 2022).

Most recently, Washington’s labor force grew by 63,531 residents (up 1.6 percent), from 3,935,387 residents

in July 2021 to 3,998,918 this July.

The Wenatchee MSA’s CLF revived from 66,257 residents in 2020 to 66,781 in 2021, a 0.8 percent

upturn. Year over year, the local Civilian Labor Force expanded in the 12 months from June 2021 through

May 2022 before retrenching in June and July 2022. Current Local Area Unemployment Statistics (LAUS)

estimates indicate that there were 1,154 fewer Chelan or Douglas County residents were in the CLF in July

2022 than in July 2021, a -1.5 percent downturn (Figure 3). Fortunately, the number of unemployed

residents in the Wenatchee MSA plummeted from 3,403 in July 2021 to 2,283 in July 2022, a -32.9 percent

decrease (Figure 3). This noteworthy drop in the number of unemployed helped depress the local

unemployment rate from 4.5 percent in July 2021 to the extremely low reading of 3.1 percent this July.

Despite a historically low unemployment rate, all local labor force trends are not positive, especially when

compared with the pre-COVID era of 2019. Specifically, the Wenatchee MSA's Civilian Labor Force

(CLF) contracted from May through July 2022 below the corresponding three months in 2019 (i.e., in the

pre-COVID era). Conversely, from January through July 2022 Washington's CLF expanded above January

through July 2019, but the growth pace decelerated from March through July 2022.



Nonfarm industry employment

Year over year, the Wenatchee MSA's nonfarm market contracted for 12 months (April 2020 through

March 2021) prior to employment increases during each of the past 16 months (April 2021 through July

2022). Between July 2021 and July 2022, total nonfarm employment in Chelan and Douglas counties (the

Wenatchee MSA) rose from 47,300 to 48,800 jobs, a 1,500 job and 3.2 percent upturn, somewhat slower

than Washington’s nonfarm job growth pace of 4.8 percent during this period (Figure 4).

Summaries of employment changes/trends between July 2021 and July 2022 for three local industries

(construction, education and health services, and leisure and hospitality) are provided as follows:

• In the mining, logging and construction category (Figure 3), most jobs are in “construction.” Year

over year, employment in the Wenatchee MSA's construction industry has expanded for 20

consecutive months (December 2020 through July 2022) as partially shown in Figure 5. This July,

construction provided approximately 3,400 jobs in the MSA, a 100 job and 3.0 percent advance

over the 3,300 jobs tallied in July 2021 (Figure 3). Also, the July 2022 Real Estate Snapshot newsletter

published by Pacific Appraisal Associates shows that there were 49 fewer closed sales of single-

family homes or condominiums in the first seven months of 2022 in the Wenatchee Market (i.e.,

in Wenatchee, Malaga, East Wenatchee, Orondo, and Rock Island, WA) than from January

through July 2021. This equated to a -8.6 percent downturn as closed sales fell from 569 (January

through July 2021) to 520 (January through July 2022). However, the number of active listings has

skyrocketed from 50 listings in July 2021 to 162 in July 2022 (up by 112 listings and 224.0 percent)

– so many more units are currently “on the market.” Reference home prices in the Wenatchee

market; they’ve been surging. This Real Estate Snapshot newsletter stated that the median sales price

of homes/condos sold in the Wenatchee market accelerated from approximately $430,000 Year-

to-Date (YTD) in July 2021 to $500,000 YTD in July 2022, a jump of 16.3 percent. Statewide,

construction employment has been rising for 16 months, or from April 2021 through July 2022.

Between July 2021 and July 2022, the number of construction jobs across Washington advanced

by 5.2 percent (up 11,800 jobs) from 228,900 jobs to 240,700 (Figure 5). Much of this year-over-

year upturn in Washington’s construction industry has occurred amongst specialty trade

contractors (i.e., roofing contractors, electrical contractors, plumbing contractors, painting/wall

covering contractors, etc.) where the number of jobs grew by 8,200 from 146,600 in July 2021 to

154,800 in July 2022 (up 5.6 percent)

• Between the pre-pandemic year of 2019 and calendar year 2021, average annual education and

health services employment rose from 7,600 to 7,800, a 200 job and 2.4 percent upturn. In this

combined (private education and health services) category, health services accounts for the lion’s

share of employment. Year over year, employment in this industry has either stabilized or

expanded in each of the past 16 months (April 2021 through July 2022). Recently, between July

2021 and July 2022, the number of local education and health services jobs advanced from 7,800

to 8,100 respectively, a 300 job and 3.8 percent upturn (Figure 3). Statewide this industry has added

jobs during each of the past 16 consecutive months (April 2021 through July 2022). Current

Employment Statistics (CES) estimates indicate that Washington’s education and health services

employers tallied 511,400 jobs this July versus 489,200 in July 2021, a 22,200 job and a 4.5 percent

upturn. Over half (53.6 percent) of these 22,200 new jobs generated statewide between July 2021

and July 2022 were in the social assistance subsector (NAICS 624). Social assistance is comprised

of the following organizations/businesses: individual and family services, community food and

housing, vocational rehabilitation services, and child day care services.

• COVID-19-related layoffs in leisure and hospitality were more severe than layoffs in any other

Wenatchee MSA industry during 2020. In fact, of the 2,900 nonfarm jobs lost in 2020 across the

MSA, 1,600 jobs, or 55.2 percent, were in the leisure and hospitality sector. Conversely, re-hiring

in the local leisure and hospitality industry was stronger than re-hiring in any other Wenatchee

MSA industry during 2021. Of the 2,300 nonfarm jobs gained in 2021 across the MSA, 900 jobs,

or 39.1 percent, were in the leisure and hospitality sector. Year over year, employment in the local

leisure and hospitality industry has increased from April 2021 through July 2022. Between July

2021 and July 2022, leisure and hospitality (primarily hotels, eating and drinking places, and

amusement and recreation services) added 200 jobs across the MSA, a modest 2.9 percent upturn

(Figure 6), as employment revived from 7,000 jobs to 7,200 (Figure 3). In fact, employment in

Washington's leisure and hospitality industry has also expanded, year over year, in each of the past

16 months (April 2021 through July 2022). However, the number of leisure and hospitality jobs in

the two-county Wenatchee MSA this July (7,200) was 300 jobs and -4.0 percent less than the 7,500

jobs tallied in the pre-COVID month of July 2019. Hence, as of July 2022, the local leisure and

hospitality industry has not recovered all jobs lost since the pandemic began. Employment in

Washington's leisure and hospitality industry has also expanded in each of the past 16 months

(April 2021 through July 2022) although at more rapid growth rates than in the Wenatchee MSA

during the past 11 months (Figure 6). Statewide, leisure and hospitality employment elevated 12.7

percent between July 2021 (308,300 jobs) and July 2022 (347,300 jobs).



Agricultural employment/production

The Bureau of Labor Statistics’ Quarterly Census of Employment and Wage (QCEW) program, conducted

by the Washington State Employment Security Department provides agricultural and nonagricultural

employment and wages for firms, organizations and individuals whose employees are covered by the

Washington State Employment Security Act. Frequently termed “covered” or “QCEW” data, this

information provides a reliable data set for comparing employment and wage trends at the county level. In

June 2022, preliminary average annual QCEW data for calendar year 2021 became available. An analysis of

industry employment and wage changes from 2011 through 2021 shows that in Chelan County:

• Total covered employment rose from 38,939 in 2011 to 42,332 in 2021, a 3,393 job and 8.7 percent

upturn with an annualized growth rate of 0.8 percent. However, agricultural employment (a subset

of total covered employment) decreased from 9,419 jobs in 2011 to 8,129 in 2021, a significant

downturn of -13.7 percent and loss of 1,290 jobs, equating to an annualized loss rate of -1.5 percent.

In 2011, Chelan County’s agricultural industry accounted for 24.2 percent of total covered

employment; but ten years later (in 2021), this industry provided only 19.2 percent of total covered

employment countywide. Hence, the agricultural share of total covered employment sank by five

percentage points (from 24.2 to 19.2 percent) in Chelan County during this ten-year period.

• Total covered wages (not adjusted for inflation) rose from $1.29 billion (in 2011) to $2.72 billion (in

2021), a $788.8 million and 61.1 percent upturn with an annualized growth rate of 4.9 percent.

agricultural payroll (a subset of total covered wages) advanced from $193.4 million in 2011 to $272.3

million in 2021, a $78.9 million and 40.8 percent uptrend with an annualized growth rate of 3.5

percent. In 2011, Chelan County’s agricultural industry accounted for 15.0 percent of total covered

wages, but by 2021, agricultural wages tallied 13.1 percent of total covered payroll; meaning that the

agricultural share of total nonfarm payroll decreased by one and nine-tenths percentage points (from

15.0 to 13.1 percent) during this timeframe. This dip in the agricultural share of wages (versus total

covered wages/payroll) in the past ten years (2011-2021) was relatively less severe than five-point drop

in the agricultural share of employment (versus total covered employment) during this period.

• The agricultural industry is still a “bedrock” to the Chelan County economy. Nevertheless, one

could generalize from these 10-year data trends that agriculture (from an employment perspective)

has become relatively less influential in the local economy. In fact, the number of agricultural jobs

actually “peaked” countywide in 2018 at 10,609 jobs (23.5 percent of total covered employment) and

then steadily declined in 2019, 2020, and 2021 (19.2 percent of total covered employment).

Anecdotal evidence suggests at least three possibilities for this agricultural employment decline in

Chelan County: automation, the gradual conversion of some seasonal agricultural jobs to year-round

positions, and the increased use of H-2A agricultural labor.

For Douglas County, an analysis of industry employment changes from 2011 through 2021 shows that:

• Total covered employment rose from 10,832 in 2011 to 12,046 in 2021, a 1,214 job and 11.2

percent upturn with an annualized growth rate of 1.1 percent. The number of agricultural jobs (a

subset of total covered employment) decreased sharply from 3,030 in 2011 to 2,289 in 2021, a 741

job and -24.5 percent downturn with an annualized loss rate of -2.8 percent. In 2011, Douglas

County’s agricultural industry accounted for 28.0 percent of total covered employment. In 2021,

agricultural employment accounted for only 19.0 percent of total covered employment countywide.

Hence, the agricultural share of employment plummeted by nine percentage points (from 28.0 to

19.0 percent) in Douglas County during this ten-year period.

• Total covered wages (not adjusted for inflation) rose from $320.5 million in 2011 to $541.7 million

in 2021, a $221.2 million and 69.0 percent upturn with an annualized growth rate of 5.4 percent. The

agricultural payroll (a subset of total covered wages) advanced from $56.2 million in 2011 to $73.7

million in 2021, a $17.5 million and 31.2 percent uptrend with an annualized growth rate of 2.8

percent. In 2011, Douglas County’s agricultural industry accounted for 17.5 percent of total covered

wages, and by 2021, agricultural wages tallied 13.6 percent of total covered payroll. Hence, the

agricultural share of wages (versus total covered payroll) showed a three and nine-tenths percentage

points contraction from 2011 to 2021 whereas agricultural employment showed a plunge of nine

percentage points during this timeframe.

• The agricultural industry is still very important to the Douglas County economy. But a basic data

trend analysis of local employment and wage trends make it clear that this industry has become

relatively less influential within the local economy between 2011 and 2021. In fact, the number of

agricultural jobs actually “peaked” countywide in 2018 at 3,278 jobs (25.3 percent of total covered

employment) and then steadily declined in 2019, 2020, and 2021 (19.0 percent of total covered

employment). Anecdotal evidence suggests at least three possibilities for this agricultural

employment decline in Douglas County: automation, the gradual conversion of some seasonal

agricultural jobs to year-round positions, and the increased use of H-2A agricultural labor.

Web link to Monthly Employment Report (MER) for Washington state

https://esd.wa.gov/labormarketinfo/monthly-employment-report