The latest Washington jobs report shows slowing yet ongoing employment growth in recent months, which seems like positive news but may be a lagging indicator of a slowing economy or an impending recession.
“We haven’t seen anything out there in the numbers that would seriously scare people, but we’re going to start to come down gradually,” said Paul Turek, state economist with the Washington Employment Security Department.
Washington had a seasonally adjusted 6,100-job increase in April compared to March, according to new figures released Wednesday by the state Employment Security Department. Meanwhile, the April unemployment rate decreased slightly from a month earlier, to 4.3%.
Continued job growth has helped nonagricultural jobs pass the seasonally adjusted pre-pandemic peak of 3.51 million from February 2020. Pandemic restrictions in March 2020 caused nonagricultural jobs to plunge to 3 million the following month.
In the years since, robust growth has helped nonagricultural job numbers return to pre-pandemic levels midway through 2022.
Another encouraging economic sign is continued job growth in leisure and hospitality, one of the hardest-hit sectors during the pandemic. The sector saw a year-over-year increase of 21,300 jobs in April, the second-highest among all industries and behind just education and health services.
“We did come out [of the pandemic],” Turek said.
Turek said that current figures indicate a strong labor market despite other recent economic developments: “It’s remarkably resilient when you compare that to other things happening throughout the economy.”
The Federal Reserve has been raising interest rates to address ongoing inflation, Turek said. However, there’s concern among economists that deliberately slowing the economy by making loans more expensive could cause a halt in business expansion and consumer expansion that would lead to a recession.
Generally, the labor market is a lagging indicator, which means it’s usually one of the last things to change before an economic slowdown or recession, Turek said. The state’s labor market may be seeing those impacts now, although he said it’s still early to know.
While a 6,100 month-to-month job increase is solid, it’s well below the increases seen in recent months. In February, the increase over January was 15,400. And last July the state saw an increase of nearly 38,000 jobs.
Meanwhile, job openings in Washington have been on a decline. In February, job openings declined by 22%, according to Employment Security.
In addition, industry sectors have cut jobs to correct over-expansion. For example, the technology industry in Seattle expanded greatly during the pandemic. However, growth has slowed, which has prompted thousands of layoffs at area companies.
However, the Seattle unemployment rate remained below the state average, at 3% in April.
“There will be some openings in tech and other places [in Seattle]. It’s just that it’s not as many as they used to be, and things have started to soften,” Turek said.