Washington unemployment nears 5% as national jobless rate falls in December

Washington state’s labor market is trending down, even as employment conditions improve nationally. New data from the Washington Employment Security Department (ESD) show the state’s unemployment rate ticking upward at the end of 2025, driven in large part by continued losses in tech-adjacent and professional services jobs concentrated in the Puget Sound region.

The state’s unemployment rate rose to 4.7 percent in December, up from 4.6 percent in November, marking a second consecutive monthly increase after holding steady at 4.5 percent from May through September. By contrast, the national unemployment rate declined from 4.5 percent to 4.4 percent over the same period. 

From December 2024 to December 2025, Washington employers shed an estimated 6,600 jobs, a 0.2 percent decline that underscores the state’s uneven recovery. During that same period, 78,870 people received unemployment benefits in December, an increase of more than 10,000 recipients from the prior month. The number of people classified as unemployed statewide rose from 186,157 in November to 192,851 in December. In the Seattle–Bellevue–Everett region, unemployment climbed even more sharply, increasing from 106,275 to 111,845 in just one month.

While Washington’s overall labor force grew modestly to 4,067,228 people, the Puget Sound region moved in the opposite direction. The Seattle–Bellevue–Everett labor force shrank by 13,380 workers year over year, suggesting some residents are leaving the workforce or the region altogether. The deepest job losses over the past year were concentrated in sectors closely tied to the tech economy. Professional and business services lost 7,800 jobs, while manufacturing declined by 6,400 positions.

Within professional services, the pain was especially felt in administrative support and employment services, which accounted for 6,400 of the losses. Economists say these roles are often among the first cut when companies slow hiring, freeze projects, or restructure operations, patterns increasingly visible across Washington’s tech sector. Overall, private-sector employment was essentially flat, rising by just 600 jobs year over year, while public-sector employment fell 1.2 percent, a loss of approximately 7,200 jobs.

The latest employment figures arrive amid an extended wave of layoffs from Washington’s largest employers. Over the past year, Microsoft cut more than 3,100 jobs statewide, Amazon eliminated over 2,300 Seattle-area positions, and Meta laid off hundreds more in the Puget Sound region. Meta also backed out of occupying two office buildings in Bellevue and allowed expansion rights for five additional development sites in the area to lapse. The tech giant also vacated a 190,000-square-foot office in South Lake Union.

Despite the trend, Washington Democrats, led by Governor Bob Ferguson, are advancing new tax proposals, including a 5 percent payroll excise tax applied to the portion of employer payroll expenses above $125,000 per employee and an income tax.