Here's a close-up of the stitch pattern. It causes quite a bit of biasing, so it would probably not be good knitted in the round. Breaking it up with the garter stitch sections also helped cut down on the biasing.
The stitch pattern is a multiple of three, and I put one selvedge stitch at each end. Here it is:
RS: p2tog, yo, k1 tbl WS: p1 tbl, p1, k1
For the k2 p2 ribbing on the armholes and neckline, I did the same semi-stretchy bind off as I did on my last sweater. For each knit stitch in the bind-off, I did a kf&b, passed the first stitch over the 2nd, then passed the last bound-off stitch over that. I used the same needle size and I find that it gives just the right amount of stretchiness.