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Washington State News

Historic Unemployment Rate and Workforce Shrinkage Lead to Cool Down in Washington State Job Market

Photo by Tim Gruver/The Center Square

(The Center Square) — Unemployment in Washington fell to a historically low rate of 3.7% in July as 6,600 jobs were added. However, the workforce contracted as well, resulting in a net loss of 8,100 people from the labor pool. 

Overall, signs initiate a slight cooling in the job market according to State Economist Paul Turek of Washington Employment Security’s DATA Division.

“The jobs reports did pick up a bit last month, but for the last three months we’ve seen a slowing down,” Turek told The Center Square. “That’s probably a trend that’s going to continue for the near future. We’re seeing an instance of the labor market beginning to cool. It’s still quite hot. We’re descending but at a slow rate.”

For the last few months, there have not been enough jobs that appealed to available workers, according to Turek, which created an imbalance of supply and demand. “We’ve had, for the most part, jobs chasing people rather than the other way around.”

The decrease in unemployment is likely being driven by shrinkage of the labor force rather than the increase in jobs, which hasn’t happened for some time according to Turek.

“It’s a tight labor market,” he said. “There are still a number of people quitting or taking time out to enjoy things a bit for the short term.”

Continued slow cooling of the job market is likely, Turek believes, as employers consider where they think the economy and inflation may be headed.

Much will depend on monetary policy decisions being made at the federal level, particularly by the Federal Reserve Board. “Our protection against inflation is pretty much determined by the Fed, so all eyes are on them,” Turek said, referring to further increases in the interest rate that may come in September.

In any case, Turek does not envision a dramatic change in the jobs forecast.

Currently, just over 4 million people are in Washington’s resident civilian workforce.

King County enjoyed the lowest unemployment in July at 2.7%. Snohomish, Adams, and Asotin counties were all under 4%.

Ferry County fared the worst at 8.1%. Grays Harbor and Pacific counties registered well above the average rate at 6.8% and 6.1% respectively. Pend Oreille and Garfield counties saw a rate of 6.1% each.

Over the past year, the greatest job gains were seen in leisure and hospitality, 39,000; professional and business services, 31,200; education and health services, 22,200; information, 16,000; manufacturing, 13,300 and construction, 11,800.