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Omicron Slows Down Washington State Job Growth

The state added less than 6,000 jobs in January, the smallest gain since May 2021. While economists expect the slowdown to be temporary, some are concerned that the Russian war in Ukraine will further delay rebound.

(TNS) — Employers in Washington state added fewer than 6,000 jobs in January, the smallest monthly gain since May 2021, as omicron dragged on hiring, according to jobs data released this week.

And while the dip is likely just a temporary hiccup, the state's top economist says economic recovery in Washington now faces some risks from inflation, including in oil and other commodities affected by the Russian invasion of Ukraine.

"The oil situation certainly doesn't help," said Paul Turek, the Employment Security Department state economist, referring to the roughly 25 percent surge in the price of crude oil since Russian forces crossed into Ukraine on Feb. 24. "There were concerns about [inflation] before the geopolitical problems that we're seeing, but that's only made it a lot worse."

Washington added 5,700 jobs in January, compared with 13,600 in December, 13,200 in November and 11,800 in October, according to Wednesday's report. The state's unemployment rate for January was 4.4 percent, down from 4.5 percent in December, and the lowest since before the pandemic.

January's numbers also pointed to some encouraging trends, Turek said. The dip in hiring coincided with the surge in COVID-19 cases fueled by the highly infectious omicron variant, which peaked just as employers were being surveyed about their hiring, he said.

The surge likely led to more layoffs while also dissuading people from looking for work, Turek said. "That's what showed up in the January report for us," he added.

January's report also brought revisions in the data from earlier months. A net loss of 500 jobs initially reported for October, for example, was revised upward to a gain of 11,800.

The revisions, coupled with the waning omicron surge, support the argument that Washington's recovery is still on track and that January was more of a "speed bump," Turek said.

But the state's recovery continues to face uncertainty — from inflation, but also from the lingering effects of the pandemic on hiring and job-seeking, Turek acknowledged.

Certain sectors, such as food service and transportation, continue to see labor shortages despite higher wages, he noted.

More broadly, many of those who left the job market during the pandemic haven't returned, and it's not clear when or if they will, Turek said.

Many older workers who took early retirement appear to have decided they can live on investment income "and are not expected to be back," Turek said.

All told, the state labor force had 3.45 million jobs in January. That's down by 64,400, or nearly 2 percent, compared with February 2020, before the first big pandemic-related layoffs began, ESD data shows.


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