State weekly regular unemployment claims rise 3.6% from previous week.

The state Employment Security Department reports an increase in unemployment insurance claims last week.

During the week of March 28 – April 3, there were 11,863 initial regular unemployment claims (up 3.6 percent from the prior week) and 426,803 total claims for all unemployment benefit categories (down 0.8 percent from the prior week) filed by Washingtonians, according to the Employment Security Department (ESD).  

  • Initial regular claims applications are now 93 percent below weekly new claims applications during the same period last year at the start of the pandemic.
  • Initial claims remain elevated (as compared to the 4-week moving average of initial claims pre-pandemic of 6,071 initial claims) and remain at similar levels of initial claims filed during the Great Recession.
  • Increases in layoffs in the Professional, Scientific and Technical Services as well as Administrative Support Services sectors contributed to the increase in regular initial claims last week.
  • Initial claims applications for Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Assistance (PEUC) as well as continued claims for regular benefits all decreased over the week.

In The Seattle Times, Paul Roberts reports,

Washington’s increase in new claims comes amid renewed concerns about the state’s rising count of COVID-19 cases even as the state vaccination program is expanding rapidly. Starting April 15, all Washingtonians 16 and older will be eligible for a jab.

Earlier, we noted an increase in UI claims nationally as well. Overall, however, we are optimistic that the economy will continue to open up and hiring resume.



Unemployment claims rise nationally, even as economy continues to show signs of strengthening.

The Department of Labor today reported another small uptick in jobless claims last week. Rather than focus on that, however, we’ll call attention to the bold-face statement below (our bolding).

In the week ending April 3, the advance figure for seasonally adjusted initial claims was 744,000, an increase of 16,000 from the previous week’s revised level. The previous week’s level was revised up by 9,000 from 719,000 to 728,000. The 4-week moving average was 723,750, an increase of 2,500 from the previous week’s revised average. The previous week’s average was revised up by 2,250 from 719,000 to 721,250.

The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending March 27, unchanged from the previous week’s revised rate. The previous week’s rate was revised down by 0.1 from 2.7 to 2.6 percent. The advance number for seasonally adjusted insured unemployment during the week ending March 27 was 3,734,000, a decrease of 16,000 from the previous week’s revised level. This is the lowest level for insured unemployment since March 21, 2020 when it was 3,094,000.

To us, that looks like progress. The Associated Press report also notes signs of a strengthening economy and puts the claims numbers in context.

Economists monitor weekly jobless claims for early signs of where the job market is headed. Applications are usually a proxy for layoffs: They typically decline as the economy improves. Or they rise as employers retrench in response to sluggish consumer demand.

During the pandemic, though, the numbers have become a less reliable barometer. States have struggled to clear backlogs of unemployment applications, and suspected fraud has clouded the actual volume of job cuts.

By nearly all measures, though, the economy has been strengthening. During March, employers added 916,000 jobs, the most since August, and the unemployment rate declined from 6.2% to 6%. In February, the pace of job openings reached its highest level on record. Last month, consumer confidence posted its highest reading in a year.

And this week, the International Monetary Fund forecast that the U.S. economy will grow 6.4% this year. That would fastest annual pace since 1984 and the strongest among the world’s wealthiest countries.

All of which suggests that employers will keep hiring steadily this year as the broader economy improves.

More at the link.

We’d add to the upbeat news the report that growth in the U.S. services sector has climbed to an all-time high

Growth in the U.S. services sector business activity accelerated significantly in March to an all-time high, retracing the weather-related weakness in the prior month and signaling a strong recovery in industries that have been most hit by pandemic disruptions.


Initial $15 billion transportation package presented by Senate Transportation Chair

Senate Transportation Chair Steve Hobbs released a comprehensive $15 billion transportation plan yesterday, reports The Lens.

Senate Transportation Committee Chair Steve Hobbs (D-44) has unveiled an initial $15 billion Forward Washington transportation package that relies in part on revenues from a cap-and-trade bill. Though Hobbs and other committee members speaking at an April 6 work session said more tweaks will be made before advancing, testimony offered by a variety of stakeholders was mostly positive – though some did express concerns over the proposal.

Reporter TJ Martinell summarizes the major elements of the plan.

As currently written, the package would spend a total of $15.4 billion, funded primarily by $5 billion from an increase to the state gas tax of $.098 per gallon, with another $5 billion from 2SSB 5126’s cap-and-trade program. Another $800 million would be generated from a new statewide special transportation benefit assessment, or impact fees, while $700 million would come from new per-trip fees for third-party delivery services.

The transportation package would fund several major projects in the state, including $2.3 billion in fish barrier removal as part of a U.S. court injunction affecting culverts on state highways. Another $3.1 billion would fund the replacement of the I-5 Bridge spanning the Columbia River from Vancouver to Portland.

More detail in the story. Here’s the revenue breakdown

Last week we wrote of Keep Washington Rolling letter 100 groups sent the governor and legislative leadership urging action this session on a comprehensive transportation bill. Several members of that coalition testified in support of the Forward Washington proposal.

Speaking in favor of the bill, Washington Roundtable Vice President Neil Strege told the committee that regarding major infrastructure and preservation needs in the state, “this plan accomplishes all of those goals. We urge you to begin negotiating as soon as possible.”

Also in support was Seattle Metropolitan Chamber of Commerce CEO Rachael Smith. “Our transportation system faced major funding gaps before COVID, and we simply can’t return to pre-pandemic (funding) levels.”

Bellevue City Councilmember Jennifer Robertson told the committee “we urge you to pass the package this session,” noting that Bellevue is expected to grow rapidly in the coming years. “With that growth comes immense pressure; we must tackle these challenges.”

The Seattle Times today reports on the state’s deteriorating highways and bridges. The backlog is substantial.

The state would need to spend an estimated $14.8 billion over the coming decade, or nearly $2,000 per resident, to achieve “minimally acceptable condition,” meaning roads, ferries and bridges could be maintained faster than they crumble. That’s twice the current spending on preservation, which WSDOT defines as planned repairs that extend the life of an asset, as opposed to stopgap jobs like pothole filling.

More to come.

Washington Research Council reports on House-passed operating budget

The Washington Research Council has published a brief blog post on the House-passed budget. Earlier, we linked to their assessment of the Senate-passed budget.

Here’s the crux:

On Saturday the House passed its operating budget. As passed, it would appropriate $52.319 billion from funds subject to the outlook (NGFO) for 2019–21 (a decrease of 2.6% over the 2020 supplemental) and $58.479 billion from the NGFO for 2021–23 (an increase of 11.8% over the proposed 2021 supplemental).

The House-passed budget would appropriate $1.189 billion less over three years (NGFO) than the budget passed by the Senate.

Both budgets boost spending a lot and rely on a controversial 7% capital gains tax. The final budget deal will be hashed out in conference committee negotiations. 

Washington revenue growth tops the nation in new Pew analysis. So why are lawmakers considering tax increases?

A Pew analysis shows Washington tops the nation in state revenue growth in FY 2020 and FY 2021. The Pew graph below shows biggest gains and losses among the states.

Idaho and Utah come in second and third. The biggest losses, Pew notes, come in states dependent on energy and tourism: Wyoming, Alaska, and Hawaii.

Of Washington, the report states,

Several states with strong economies leading up to the pandemic avoided a drop in total revenue.   

Washington projects solid revenue growth to continue this fiscal year and, when combined with increases last year, expects to collect nearly 12% more than if collections had stayed at pre-pandemic fiscal 2019 levels, the largest two-year gain nationally. The state’s recent forecast cited strong retail sales and a booming real estate market. Idaho also projected its revenue this and last year will surpass its pre-pandemic forecast, with recent monthly tax collections still topping updated estimates.

Pew reports that, unlike Washington, Utah is using its revenue growth to provide tax relief.

Despite the recession, Utah similarly took in enough revenue to pass a series of tax cuts for Social Security recipients, veterans, and families with children.


A Pew analysis of the most recently revised general fund revenue forecast issued in every state finds vast differences in the projected toll of the recession over the two fiscal years since the pandemic’s start:

  • 19 states projected revenue to fall in the current budget year, which typically ends June 30, with 13 of those estimating declines on top of losses last year.
  • When both this and last fiscal year are considered, 23 states expect total estimated revenue to be lower than it would have been had it remained at pre-pandemic fiscal year 2019 levels, not accounting for inflation.
  • A dozen states expected to maintain positive revenue growth in nominal dollars for fiscal 2020 and fiscal 2021, but generally at a slower rate than originally forecasted.

The Washington economy and revenue structure performed extraordinarily well. It’s a curious time for lawmakers to be considering tax increases and tax policy changes – like a capital gains tax and wealth tax – that could jeopardize the state’s economic vitality.

State Senate passes $59.3 billion 2021-2023 operating budget, up 12.5% from current budget.

The state Senate yesterday passed its 2021-2023 operating budget and 2021 supplemental budget. The Washington Research Council writes,

Yesterday the Senate passed its operating budget. As passed, the 2021 supplemental to the 2019–21 budget would appropriate $52.704 billion from funds subject to the outlook (NGFO). That’s a reduction of 1.9% from the enacted 2020 supplemental, but an increase of 17.9% over 2017–19.

The 2021–23 biennial budget would appropriate $59.282 billion from the NGFO, an increase of 12.5% over the 2021 supplemental. As I noted earlier this week, the Ways & Means Committee had approved a version of the budget that left just $1 million in unrestricted reserves at the end of 2023–25. Floor amendments yesterday improved that figure to $50 million. The improvement was primarily due to a technical amendment that corrected funding amounts for the expansion of the Early Childhood Education and Assistance Program (ECEAP).

Read the blog post for more detail. The Senate also appropriates $6.3 billion in federal aid. This observation from WRC senior analyst Emily Makings caught our eye:

There are some indications that the budget would use federal relief funds for ongoing programs. A major example is child care. Sec. 229(5) notes the “substantial additional funding” the federal government has provided in the pandemic relief bills for child care. It adds that the Legislature intends to “implement these federal purposes” by passing E2SSB 5237. “The legislature finds that the state lacked the fiscal capacity to make these investments and the additional federal funding has provided the opportunity to supplement state funding to expand and accelerate child care access, affordability, and provider support as the state navigates the COVID-19 pandemic and its aftermath.”

More in The Columbian,

The House is expected to pass its version of the operating budget tomorrow.

Nationally, small business job openings reach record levels. Jobs recovery still uneven across states, sectors.

As vaccinations proceed and state and local economies emerge from lockdowns, small businesses are hiring again, or trying to. NFIB reports job openings are at record levels.

According to NFIB’s monthly jobs report, 42% (seasonally adjusted) of small business owners reported job openings they could not fill in the current period, a record reading. The March reading is 20 points higher than the 48-year historical average of 22%.

“Where small businesses do have open positions, labor quality remains a significant problem for owners nationwide,” said NFIB Chief Economist Bill Dunkelberg. “Small business owners are raising compensation to attract the right employees. It is important that lawmakers focus on policies that will help strengthen job growth and not deter the small business recovery.”

As usual, the biggest challenges involve finding skilled workers.

Thirty-four percent of owners have openings for skilled workers and 19% have openings for unskilled labor. In the construction industry, 50% of the job openings are for skilled workers. Fifty-five percent of construction firms reported few or no qualified applicants (down six points) and 38% cited the shortage of qualified labor as their top business problem (up three points).

Finding qualified employees remains a problem for small business owners. Ninety-one percent of those owners trying to hire reported few or no “qualified” applicants for the positions they were trying to fill in March. Twenty-eight percent of owners reported few qualified applicants for their open positions and 23% reported none.

The jobs recovery remains very uneven across states and sectors. Pew reports

While the nationwide number of workers who have been temporarily laid off has declined sharply, permanent job losses remain stubbornly high—about 3.5 million in February. The permanent job loss category covers people who, like Lee, don’t have a job to return to, and need to find a new one when the economy reopens completely.

At the height of the jobless crisis in April, 78% of the then 23 million unemployed Americans were temporarily laid off and only 9% were in the permanent loss category. As of last month, more than a third of the remaining 10 million unemployed were in the permanent loss category.

Those 3.5 million people total more than twice the pre-pandemic number of 1.3 million in February 2020, according to federal Bureau of Labor Statistics reports.

Economists warn that that increase will slow the recovery, leaving states looking for ways to retrain workers or get them into college, and to keep additional workers from losing jobs by creating job-sharing arrangements.

The Pew report includes an interactive map comparing current employment levels with those of January 2020. Washington is shown has currently has 94.9% of the jobs it had in January 2020.

Progress, but there’s clearly a hill to climb.



House Finance Committee passes controversial wealth tax; no, we don’t know why.

We saved this for today so no one would mistake it for an April Fools joke. The House Finance Committee voted March 31 to pass HB 1406, a controversial wealth tax (or “billionaire’s* tax”). We previously wrote about the tax here.

There’s no question: The money is not needed. Even the expansive House and Senate budget proposals did not rely on the tax, although they did include a capital gains tax. 

The Lens reports,

If enacted, the bill would impose a one percent wealth tax on all “intangible” financial assets a resident has that totals more than $1 billion.

An estimated 100 Washington residents would be subject to the tax, though 97 percent of the revenue would come from a handful of billionaires including Bill Gates and Jeff Bezos. The original bill would have directed the revenue into the general fund, while the substitute places it in a newly created tax justice and equity fund.

The bill report explains,

The Washington Tax Justice and Equity Fund (WTJE) is created. Moneys in the fund must first be used to offset reductions in revenue from the anti-displacement property tax exemption program and may be used after that to offset reductions in revenue due to implementation of a variety of other tax policies.

All revenues from the wealth tax, including penalties and interest, are to be deposited into the WTJE fund.

While the headline says, “we don’t know why,” this is the sponsor’s explanation:

For supporters such as Chair Noel Frame (D-36), the tax is regarded as a tool to rebalance perceived inequities in the existing state tax code that relies primarily on a sales tax and property tax.

Meanwhile, as The Lens reports, a state tax structure work group is studying the Washington tax system, with a report due out next year. So, perhaps the wealth tax is premature? Again, from The Lens:

Ranking Member Ed Orcutt (R-20) said that’s just one of several reasons he’s opposed to the proposal, noting also that the state has received billions in additional revenue in recent years. “Seems like somewhere along there we should have done…some other form of tax relief and not have to go resort to raising taxes on someone else.”

The bill has been referred to the House Finance Committee.

*The “billionaire’s” tax may have quite a reach. Washington Research Council economist Kriss Sjoblom explains it could turn out to be “a wealth tax for all,”