How Can Jobs & Unemployment Both Increase In Washington State?

The February jobs and unemployment numbers for Washington State have been released by the Employment Security Department.  Both numbers tell a story, but one that may be puzzling if just taken at face value.

There were an estimated 2,600 seasonally adjusted jobs created in the Evergreen State in February, good news right?  Creating jobs is always a good thing.  Yet even with job creation the unemployment rate ticked up .01% to 4.7%.  That is the fifth straight month unemployment has gone up and it is the highest rate since September of 2021.

How Do You Create Jobs & See Unemployment Go Up?

There are a couple of reasons this can happen.  The first is that supply (jobs) and demand (workers) don't match.  Debt.org summed it up like this"

There aren’t enough jobs being created quickly enough for people.

When that happens the unemployment rate goes up and not down as you might think.

The second is what Hubbard O'Brien Economics described:

Employment and unemployment both increasing during a month happens fairly often during an economic expansion as some people who had been out of the labor force—and, therefore, not counted by the BLS as being unemployed—begin to search for work during the month but don’t find jobs.

In that case more re-enter the workforce and do not find work than the number of jobs created, hence the increase in both categories.

There s A Bigger Concern...

...and that is five straight months of unemployment increasing, in fact, the last time the unemployment rate went down in Washington State was July of 2023.  We also have a higher unemployment rate than the same time last year.

The unemployment rate going up in December of last year even with the addition of over 15,000 jobs further shows job creation doesn't always equate to a drop in unemployment.

In order for that number to drop the economy needs to grow faster causing the demand for labor to also increase at a greater rate.  On a side note, the national unemployment rate is at 3.9%, nearly a full percentage point below Washington State.