Labor market continues to grow, tech layoffs yet to impact

Following the past month’s news of tech layoffs at Amazon, Meta and other companies with headquarters or hubs in Seattle, Washington State Employment Security Department (ESD) regional labor economist Anneliese Vance-Sherman says the state’s labor economy remains solid.

Vance-Sherman said ESD is still receiving a historically low level of unemployment claims, which show layoff activity. “We are still looking at a tight labor market,” she said.

Washington saw a decrease in initial unemployment claims filed in the week of November 20-26 but has seen an increase in the month of November that Vance-Sherman said was not significant and likely not due to tech layoffs.

Over 5,600 claims were filed in the week ending November 26 and 4,982 were filed in the corresponding week in 2021. Just over 6,600 were filed in the week ending November 19. In 2020, ESD saw 30,274 filed in that same week.

Vance-Sherman said some tech layoffs did show up in a recent ESD report. October saw a loss of 5,900 jobs in the information systems sector statewide. But most layoffs in the tech sector likely won’t be seen in unemployment claims because, she said, those workers will receive severance
packages. 

Whatcom County saw a slight increase in unemployment claims last week, but numbers continue to be at or below where they were pre-pandemic. There were 166 initial unemployment claims filed in the week of November 20 to November 26, and the week before ESD saw 139 filed. In the corresponding weeks a year ago, 133 and 181 initial claims were filed, while 662 and 985 were filed the same weeks in 2020, according to ESD data.

The U.S. economy has also rebounded since real gross domestic product (GDP) contracted at the beginning of the year. National GDP grew by 2.9 percent in the third quarter of 2022, while in the first and second quarter of the year GDP decreased at an annual rate 1.6 percent and 0.6 percent.

Vance-Sherman previously said in August that the indicators of an economic recession are two consecutive quarters of declining GDP and labor market health. At the time, she said labor market health was strong, slightly indicating that recovery was on the horizon this summer. 

Washington’s preliminary seasonally adjusted unemployment rate for October 2022 was 3.8 percent, according to ESD data, up a decimal point from September 2022’s revised rate. The October 2021 unemployment rate was 4.6 percent, and over 60,000 workers joined the state labor force in the past year. 

In Whatcom County, the preliminary unemployment rate was 4.0 percent in October 2022. The revised rate for September 2022 was 3.9 percent. A year ago the unemployment rate was 4.7 percent. It reached a high of 17.4 percent in April 2020. Over the year, the labor force gained 445 workers, about 0.4 percent.

Nationally, the unemployment rate was 3.7 percent in October 2022 and 4.6 percent in October 2021.

Vance-Sherman said labor force participation is recovering but still taken a major hit since the pandemic. She said some of the lack of workers may be due to a large baby boomer generation retiring and being replaced by a much smaller population in Generation Z.

One area of concern Vance-Sherman said is Washington’s childcare centers, nursing homes and long-term care facilities, which are short-staffed and have been struggling to find workers since the pandemic. 

“We are continuing to see growth, but it is tapering off somewhat compared to early growth following the pandemic,” Vance-Sherman said about labor market growth.