While the latest employment reports show the labor market slowing across the country, Washington state continues to face a different set of challenges. Up until the end of June, US employers were still adding jobs (albeit at a pretty slow pace), Washington’s June jobs numbers, which don’t get published until late July, were noticeably softer, with higher unemployment and little to no momentum coming from the private sector.

For employers trying to hire, retain talent, or make staffing decisions, these kind of differences between what is going on locally and nationally, matter.

The National Picture: Hiring Has Definitely Slowed, but the Labor Market Remains Stable

According to the latest U.S. Bureau of Labor Statistics report, employers added 57,000 jobs in June, well below the pace seen over the past several years. The national unemployment rate edged down to 4.2%, although much of that decline reflected fewer people participating in the labor force rather than a surge in hiring.

Employment gains were concentrated in:

• Professional and business services
• Healthcare
• Social assistance

Jobs in the leisure and hospitality industries held stead or declined slightly, reflecting a cooling economy but not yet widespread layoffs.

Most analysts would say that the national labor market is slowing—but not collapsing, which, for most employers translates into an opportunity to do more selective targeted hiring.

Washington Continues to Trail the Nation

Washington’s just published June employment report paints a more cautious picture. The state added approximately 5,400 jobs during the month while the state’s unemployment rate stayed steady at 5.2%, a full percentage point above the national average of 4.2%.

The good news in these numbers for Washington busiesses is a larger pool of available workers than might be available in other states. The bad news is that the data reflects a labor market that is still in recovery mode, definitely not growing.

Government Hiring Tells the Story!

One notable difference between Washington and the U.S. is where new jobs are coming from. Nationally, most if not all recent job gains come from private employers. In Washington, nearly three-quarters of June’s job growth came from government employment. Private employers added only 1,400 jobs statewide, suggesting that many businesses remain cautious about anything to do with expanding their employee foot print.  

What This Means for Small Businesses

For small and mid-sized employers, today’s labor market creates both opportunities and challenges.

• Hiring may become a little easier. With unemployment higher than the national average, businesses may find slightly larger candidate pools than they experienced over the past few years.

• Finding Top talent is still a competitive sport! Although hiring has cooled, skilled candidates remain in demand. High performers still have multiple employment options, employers must still be willing to offer competitive wages, strong workplace cultures, and efficient hiring processes.

• Hiring mistakes are still expensive. When economic growth slows, every hiring decision carries greater weight. Small businesses often have limited room for error, making structured hiring practices – things like skills assessments, behavioral interviewing, and reference checks—even more valuable.

The Bottom Line

The U.S. labor market is clearly cooling, but it remains fundamentally stable. Washington’s economy, however, continues to underperform the nation on several key employment measures.

Here’s the executive level summary….

For employers who have a solid reason to hire, here’s the key take aways……

• There may be a few more applicants than there were a year ago, but attracting and retaining exceptional employees still requires a thoughtful hiring strategy.

• Companies that define their hiring needs clearly, assess candidates based on skills—not just résumés—and move efficiently through the hiring process will continue to have an advantage, regardless of what the monthly jobs report says.