Seattle Labor Market Faces Sharp Decline Amid National Resilience

In a recent government meeting, officials discussed the contrasting performance of the U.S. labor market compared to regional economies, particularly focusing on the Seattle area. While the national labor market has shown resilience with job openings exceeding pre-pandemic levels by 10-15%, the Seattle region is experiencing a significant downturn, with job openings more than 20% lower than before the pandemic.

The unemployment rate in Seattle has also reversed its historical trend, now exceeding the national average by 2.2%. This shift marks a notable change, as the Seattle area traditionally boasted lower unemployment rates. The meeting highlighted that recent employment estimates from the Washington State Employment Security Department have been revised downward, indicating a mere 0.3% year-over-year growth in jobs, a stark contrast to earlier projections of around 1.5%.

Officials noted that the Seattle labor market is cooling off at a faster pace than the national average, with job growth expected to lag behind both Washington State and national levels throughout 2024. Projections indicate a growth rate of only 0.7% for the Seattle region compared to 1.3% for Washington State and 1.6% for the U.S. overall.

The meeting also addressed potential impacts of a recession, with predictions suggesting that job losses in Seattle could reach 2.5% under a baseline scenario and up to 5% in a more pessimistic outlook. This discussion underscores the challenges facing the Seattle labor market as it navigates a period of slower growth and potential economic downturn.