📈 Business Matters with Frank Catalano 06/02/26

Knowledge nuggets from numbers: You might not expect something nicknamed "the dismal science" to generate “aha” moments.

Yet I went looking for them. The prompt? Two intriguing events about the discipline of economics a month apart: February’s annual Economic Forecast Night held in Anacortes by the Economic Development Alliance of Skagit County, and March’s Bellingham City Club program, “It’s the Economy, Stupid.”

Each offered a window into what actual economists find interesting about the economies of Skagit and Whatcom counties, respectively. And what they think — based on their comments at the events and in conversations I had with several economists after the fact — might be underappreciated or misunderstood by many of us.

In Whatcom County, aha could start with housing affordability.

In their City Club presentation, James McCafferty and Hart Hodges, co-directors of the Western Washington University Center for Economic and Business Research, tackled the oft-repeated headline that Bellingham has the most expensive housing in the U.S. for a city its size.

That conclusion, they said, was based on some bad underlying data. It turned out with additional measures and analysis, among “peer cities,” Bellingham is third.

Ahead of Bellingham on housing costs relative to income? Santa Cruz, California, followed by Flagstaff, Arizona. The speakers noted both have bigger problems, even as Hodges reiterated Bellingham still had “big, big challenges.”

“Any of the cities that are also tourism-based or have natural assets and are attractive have expensive housing,” Hodges said. But after the top two, “we beat everybody else, if there’s any consolation.”

Rents? Bellingham was actually found to be similar to most of its peer cities.

Another common misconception, McCafferty said to me by phone after the event, was that Whatcom County’s economy is “different” because it relies so much on small businesses. He said that the number of people employed by small businesses is very similar across all communities in the state.

“The difference in Whatcom County is you don’t have the larger businesses you might have in a King County,” he said. No Boeing. No Starbucks. No Microsoft. “The top-end tier we don’t have as much, but the rest is pretty much the same.”

Without the largest employers, I suggested small businesses may appear more prominent since the big companies aren’t there to poach the public’s focus. Especially in what both McCafferty and Hodges pointed out is a small countywide economy with fewer than 100,000 nonfarm jobs. As McCafferty said, “in smaller communities, you just feel more connection” to small business.

In Skagit County, aha could start with manufacturing.

Speaking at the EDASC event, Anneliese Vance-Sherman, chief labor economist for Washington state, said manufacturing “really jumps out” as having helped drive job growth in Skagit County in recent years. She said manufacturing ranked third of the county’s largest employment sectors, behind government (including schools and tribal governments) and retail.

It’s a trend also noted by Toby Paterson, state Employment Security Department regional labor economist for Northwest Washington.

“There’s seemingly a boom in manufacturing in Skagit County going on,” Paterson told me. While some of the data is current just through 2024, he said, “it shows growth at a pretty steep upward trend.”

Skagit County, of course, is home to Janicki Industries, which has repeatedly announced expansion and hiring efforts over the past few years. WWU’s CEBR, in an annual list of top employers by county, puts Janicki at number two and PACCAR at number eight, the only employers in the top 10 that aren’t healthcare, education or government.

What about agriculture, of the Tulip Festival and Scenic Corridor interstate signs?

“It’s a misconception that agriculture is huge in Skagit, in terms of GDP,” Paterson said. He pointed to the Census of Agriculture from the USDA’s National Agricultural Statistics Service.

NASS shows — that while agriculture might be important and very visible — Skagit County ranked ninth in the state for the market value of ag products sold in NASS’ most recent five-year census, behind number one Yakima and number seven Whatcom. Yakima is also the top county for acres of land in farms; Skagit and Whatcom don’t make the top-five list.

Bigger is a sector that is more out of sight for many, so perhaps more out of mind.

“Oil refining is a large part of the GDP in Skagit County,” Paterson said, with a nod to Sinclair and Marathon (formerly Tesoro) operations at Anacortes. “And that’s something that a lot of people don’t realize, because it’s far from the freeway.”

Several people I spoke with emphasized that both Whatcom and Skagit counties have smallish labor forces. To be imprecise, Skagit’s labor force — people over 16 who are working or actively seeking work — is about half the size of Whatcom’s.

And they’re getting smaller.

Employment Security Department’s Paterson said both counties lost labor force participation between December and March: “not a huge change, about a thousand workers” in each county. Yet over the same period a year ago, he said Skagit’s went up by several hundred people and Whatcom’s was flat. Paterson characterized the slight shrinkage as “interesting.”

At the same time, Hodges and McCafferty highlighted a different trend: fewer job postings.

McCafferty said going back a year from late April, Skagit job postings have been consistently down every week except one. The same general pattern held true in Whatcom. By the time the week of April 20, 2026 rolled around, he said, Skagit County had 800 fewer job postings that week than a year earlier, and Whatcom County had 1,000 fewer.

The impact isn’t one you’ll see in widely reported unemployment rates. McCafferty, in the City Club presentation, said that the combination keeps the unemployment rate from spiking because the rate is a ratio, a percentage. Fewer workers seeking fewer jobs holds it steady.

But the reasons for the missing jobs and missing workers aren’t immediately clear. The disappearing postings — though no one said this outright — possibly are a contraction tied to the national economy. McCafferty said the people part could have several causes: net emigration (workers leaving the counties), more gig work in the unofficial labor economy, and/or possibly an increased number of retirees.

Interesting? Definitely. Unsettling? Maybe.

But also under the radar of most people. Still, educating is also what economists do.

“At the end of the day, what we really want is for people to have an understanding of what’s happening with the economy,” McCafferty said. “Not just reading it off bumper stickers … or reading something online.”

Hodges said it’s an understanding that’s key for those imagining what they’d like the region to be.

“I think you have to be well grounded … really understand what you have, why the numbers are what they are, and so on,” he said, “when thinking about what you can leverage and what you might want to nudge if you want to go in a particular direction.”

In May, I asked about shopping: specifically, your favorite Bellingham retail hub to wander and explore. Fairhaven blew past the other six options, getting more than half of the 143 votes cast. Downtown (including Old Town & Waterfront) was second, at a quarter of those polled.

Perhaps it’s no surprise. Both neighborhoods are foot-friendly. As one reader commented, “Fairhaven is fun. Historic architecture. A large variety of businesses to explore.” Another pointed out that popularity can be a mixed blessing for parking, though: “It’s hard to find a spot sometimes … because other shoppers like the area too.”

For June, let’s return to the dismal science, shall we?

Tig Notaro’s “Hardware Sales” moment: How many locally owned businesses get a literal shoutout during a national comedian’s sold-out Mount Baker Theatre appearance? Tig Notaro, during her May 14 show, started to tell a story about going to Home Depot, then changed it to Lowe’s, then asked if we had one.

I heard someone in the front yell, instead, “Hardware Sales!” Tig asked them to repeat it; the audience erupted with “Hardware Sales!” Initially, she didn’t realize it was the name of a local hardware store (she said she thought it was more of an activity). But once she did realize, it became part of the show, with the audience shouting “Hardware Sales!” on command to audience cheers. It was a wonderful continuing gag.

“Unprecedented: Private Equity Firm Potentially on Hook for Portfolio Company’s Data Breach”: Legal firm advisories aren’t usually interesting reading, but this one from Womble Bond Dickinson was stunning to me, a former education technology executive who once expressed concerns about private equity’s reach into schools.

The article said in a first-of-its-kind ruling, a federal judge is letting those suing K-12 student information software provider PowerSchool over a data breach continue their claims against its owner, PE firm Bain Capital — even though Bain had not completed its purchase of PowerSchool when the breach began. At issue: Bain’s alleged influence, pre-closing, on cuts to company costs, including cybersecurity. WBF calls it “a cautionary tale.”

June 11: Multi-Chamber After Hours, Skagit Chamber Alliance, The Bone Pony in Mount Vernon
June 11: Chamber Luncheon Award Ceremony, Anacortes Chamber of Commerce, Majestic Inn & Spa Ballroom in Anacortes
June 24: Chamber Night at the Bells, Bellingham Regional Chamber of Commerce, Joe Martin Field in Bellingham
June 24: Washington Attorney General Nick Brown, Bellingham City Club, Bellingham Yacht Club
June 25: Beyond Social - Expand your marketing reach, Sedro-Woolley Chamber of Commerce, Sedro-Woolley Chamber offices
July 9: Multi-Chamber After Hours, Skagit Chamber Alliance, Majestic Inn in Anacortes