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Washington job market shrugs off recent tech layoffs – for now

By Paul Roberts, The Seattle Times
Published: December 15, 2022, 5:05pm

SEATTLE — Washington’s tech companies are cutting thousands of jobs, but hiring in other industries remains surprisingly strong despite new signs of a slowdown next year.

Employers in Washington added an estimated 13,100 jobs in November, the state Employment Security Department reported this week. That’s roughly double the job growth in October and also beats the 11,000 new jobs the state averaged each month during the preceding 12 months.

Hiring was especially strong in the health care and social assistance industries, which added 4,600 jobs in November; professional and business services (2,200) and government (2,100).

Restaurants, hotels and other employers in the hospitality industry, which was hit especially hard in the early stages of the pandemic, also continued to recover, with 1,100 new jobs in November.

Even in the construction business, which lost 500 jobs, the decline was partly due to many contractors being unable to find enough workers to meet demand on commercial projects.

“We’ve actually got multiple projects in the pipeline and on every project, our subcontractors can almost name their price because they are so short of labor,” said Matt Ohlinger, a Seattle-area assistant superintendent with developer Mill Creek Residential. “The reality is, there’s just not enough people coming into the industry.”

November’s numbers were a welcome contrast to the gloom over recent layoffs and hiring pauses at Amazon, Microsoft, Twitter and other tech firms with Seattle-area headquarters or offices.

In fact, tech hiring actually jumped modestly in November, with 1,000 new jobs, versus a revised loss of 4,700 in October.

The new jobs data suggest that while tech remains a key piece of the state economy, especially in the Seattle area, the tech slowdown hasn’t yet been a drag on on the broader job market, said James McCafferty, co-director of the Center for Economic and Business Research at Western Washington University.

“The [tech] layoffs got a lot of attention but at this point are not expected to be dramatic from an economy perspective because we expect many of the people will find ready employment,” McCafferty said in an email Thursday.

But not all the recent jobs numbers are good.

Hiring also slowed in some sectors that would ordinarily have expected growth in November. State retailers, for example, were down 1,300 jobs compared to historical numbers, said Anneliese Vance-Sherman, a regional economist with ESD who covers the Seattle-area job market.

Unemployment in Washington rose to 4 percent in November, versus 3.8 percent in October. That’s still low by historic standards, but higher than the 3.7 percent national rate. It’s also the third increase in Washington since the summer months, when unemployment in Washington appears to have bottomed out at 3.7 percent.

Last week, 6,605 Washingtonians filed initial claims for jobless benefits, the ESD reported Thursday. That’s down from the prior week, and low by pre-pandemic standards, but it’s also nearly 40 percent higher than the weekly average of the past 12 months.

Notably, the number of unemployment claims filed each week by tech workers since Oct. 30 is around 60 percent higher than during the past 12 months.

And those claims might reflect only a fraction of recent tech-industry layoffs, many of which were announced in November. Those layoffs might not actually happen for months, said Vance-Sherman.

“This is likely to be a slow-moving situation, especially among large employers,” Vance-Sherman said.

More broadly, a growing number of forecasts show job growth in Washington and elsewhere stalling out late next year.

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Economists are especially concerned that higher interest rates, which are seen as necessary to curb inflation, will eventually slow investments into job-generating businesses, such as construction.

“You can have permits, and you can have drawings done, and if you’re unable to get the financing, then you’re unable to start the project,” said Mill Creek Residential’s Ohlinger.