Surprise! Seattle Makes the Jump into Top 15 Metros
In July, Seattle emerged as one of the fastest-growing labor markets in the United States. Seattle jumped into the top-15 labor markets at number 14. This jump comes after over a year well below the top 25 metro areas, including a low ranking of 77 in January 2021, according to the LaborIQ® Index.
The strong recovery in the Seattle metro area appears closely linked to growth in jobs combined with strong market fundamentals. From the end of 2020 through March of 2021, Seattle ranked near the bottom of the largest 150 metro areas, with more job losses and lower job growth that most other large metros. However, after months of slow steady increases, Seattle added 11,400 jobs in July 2021.
Compared to other large metro areas, Seattle’s progress to pre-pandemic employment recovery was near the bottom for most of 2020 and early 2021. These recent job gains have Seattle on pace to recover all jobs lost during the pandemic by 2023.
Strong Fundamentals and Job Growth Fuel Seattle’s Rise
While Seattle’s big jump to the top 15 might seem surprising, the metro area’s strong market fundamentals meant it was not if but when Seattle’s strong recovery took hold.
The Seattle metro area is home to a variety of industries, including technology and manufacturing, and companies, including Amazon, Boeing, and Microsoft, that contribute to its strong market fundamentals. The area’s high hourly earnings, net-migration, educational attainment, and GDP growth are consistently among the highest of the nation’s largest metro areas.
Seattle’s unemployment rate is 5.1%, consistent with Washington’s statewide unemployment rate and slightly below the national rate of 5.4%. However, alternative unemployment indicators that measure those who are “unemployed, underemployed, and those who are not looking but who want a job” indicate that the Seattle and Washington state labor markets may have more slack than the national labor market overall. So when Seattle’s businesses were ready to hire, the area had more workers available to enter the labor force.
Recently, Amazon announced a major hiring push in Seattle. The company is looking to add 12,500 jobs in Seattle – more than any other city – as a part of its nationwide hiring initiative for corporate and technical roles.
Given the rapid pace of job growth, Seattle’s housing market is booming. As workers flock to the growing labor market, rental applications are up, and homes are selling for well over asking price.
Why It Matters
Seattle is a national leader in job growth, propelling the area into the top 15 metros in the U.S. according to LaborIQ. Strong fundamentals, including local industries, an educated population, and high net-migration, contribute to growth. However, these factors have driven a competitive housing market with high demand and prices. Employers will need to watch these factors as cost of living may impact the ability to attract top talent if salaries and benefits don’t keep up.
Seattle Metro Outlook
LaborIQ by ThinkWhy forecasts that the Seattle labor market will fully recover in 2023, along with the forecasted overall U.S. recovery. Some industries in the area, including Information and Construction, have already exceeded their 2019 employment levels; and Professional and Business Services as well as Trade, Transportation and Utilities are projected to recover in 2021. Leisure and Hospitality along with Manufacturing are not predicted to reach their 2019 employment levels until beyond 2025.
LaborIQ by ThinkWhy continuously forecasts and reports labor data at all levels, measuring impact to cities, industries, occupations and business across the U.S.