The national job market may be rebounding, but hiring slowed in Washington in October, raising questions about the state's recovery as it heads into its second pandemic winter.
Employers in Washington added just 6,300 jobs last month, according to the October employment report released Wednesday from the state Employment Security Department.
That's down substantially from September's revised number of 18,800 jobs and represents the smallest increase since May, when the state added just 2,700 jobs, according the report. The state's unemployment rate fell to 5%, down slightly from 5.1% in September.
To be fair, Washington's dismal October numbers were heavily affected by the estimated loss of 9,300 education and other government jobs, a figure that may be lowered as more data comes in.
But hiring by private employers was down around 16%, to 15,600, compared to September. "So even if you just look at the private sector jobs ... [October] is still coming in a little bit light," said Paul Turek, ESD state economist.
The weaker hiring makes Washington something of an outlier: nationally, hiring in October surged by 531,000 jobs, or 70% over September's revised number.
And, perversely, Washington's slow October also comes as many employers are still struggling to find enough workers.
That was especially clear in the state's leisure and hospitality industry, which includes restaurants, hotels, and arts, entertainment, and recreation businesses.
Nationally, those businesses saw the most October hiring of any industry. But the 1,700 leisure and hospitality jobs Washington added last month represent barely half of what the state would have seen had it matched the national trend, said Jacob Vigdor, an economist with the University of Washington Evans School of Public Policy who has studied state and local job markets.
Leisure and hospitality jobs have also been among the hardest to fill during the pandemic. Restaurants "are still struggling" to hire, said restaurateur Eric Banh, co-owner of the Seattle-area Ba Bar and Monsoon restaurants. Although his own staff shortages have eased from earlier this summer, managerial positions remain hard to fill.
It's not all bad news: Washington posted relatively strong gains in manufacturing, a sector that saw huge losses early in the pandemic. The 6,000 added manufacturing jobs represent around 10% of all manufacturing jobs added nationally, which is more than four times Washington's share of the U.S. population, Vigdor said.
But October's report also underscored the way the pandemic continues to have disparate impacts on industries and socioeconomic groups. While hiring was strong in professional services jobs, it was worryingly low or even negative in several industries that provide jobs for many lower-income workers, including leisure and hospitality businesses.
Also worrying: the state saw job losses in construction, an industry that has long been an economic driver for the region, and the transportation and warehousing sector, which is key to the supply chain.
"This is a funky jobs report for Washington state, with some sectors doing really well and others remarkably bad," Vigdor said.
Some of Washington's lackluster performance reflects the combined impacts of a continuing pandemic and seasonal conditions, Vigdor said. Unusually heavy rains in October, he said, had the twin effect of "deterring people from going out to enjoy leisure and hospitality and slowing down construction projects."
Another potential factor behind the differences between state and national trends may reflect Washington's relatively conservative approach to COVID-19 restrictions, said Hart Hodges, an economist and director of the Center for Economic and Business Research at Western Washington University.
"I wonder if some parts of the country are a little more cavalier about COVID and getting back to 'normal' while other parts — like us — are still being cautious," Hodges said. "If so, we might expect slower job growth in the cautious areas."
The October report also shows how far Washington has yet to go to recover from the massive job losses early in the pandemic. As of October, the state workforce was still 63,500 jobs short of its October 2019 size.
Most of that deficit is centered in the Seattle area, which is still down by 52,100 jobs, compared with October 2019, state data show. But the Seattle area also grabbed the lion's share of job growth in October: Although the region represents around half the state's workforce, it accounted around two-thirds of private hiring in October.
October's job numbers also did little to clarify the reasons behind the state's labor shortage. For example, even as job growth slowed, the number of people collecting unemployment benefits in Washington also fell. The four-week moving average of weekly continued jobless claims dropped by around 13,163, to 50,848, as of Oct. 30, compared to the period ending Oct. 2, the ESD reported Monday. That's the lowest 4-week moving average since the pandemic started last year.
Still, despite the disappointing numbers, some employers and economists said the conditions are right for job growth to pick up in coming months. Wages are rising in many labor-crunched sectors. Some warehouse operators recently have offered signing bonuses of $2,000 to $3,000, and many fast-food chains have raised starting wages — to $19 at Dick's Drive-In and $20 at some Taco Time locations.
The resumption of in-person school in September means many parents who were forced to stay home can now look for jobs. And, Turek said, many unemployed workers may be more motivated now that enhanced unemployment benefits, which added $300 a week on top of regular unemployment benefits, are no longer available.
Over the last quarter, a large fraction of economic growth and consumer spending was fueled by people tapping savings, Turek said. But, he added, "at some point, that runs out — you can't hold out forever without income coming in."
