After months of mostly downbeat data from Washington state’s job market, this week brought several pieces of promising news.

New, or “initial,” claims for unemployment benefits fell last week to 17,734, a 9.4% drop from the prior week, the state Employment Security Department (ESD) reported Thursday morning. While that’s still more than triple the level of the same week last year, it’s also the lowest number since the second week of March, as the big pandemic-related layoffs were starting.

And earlier in the week, employers in Washington learned they’ll be seeing smaller-than-expected tax increases through 2023 to help fill a financial hole left by the pandemic.

“Coupled with a stronger than expected state revenue forecast last week, this means an improved outlook overall and a break for employers when they most need it,” said ESD Commissioner Suzi LeVine in a statement.

Thanks partly to September’s more optimistic forecast for the state economy, the ESD now says the unemployment insurance trust fund used to pay unemployment benefits isn’t headed toward insolvency, which a June forecast from ESD predicted could happen in early 2021. Instead, the trust fund, which has fallen from $4.7 billion in early March to $2.3 billion as of Sept. 30 due to huge benefits payouts in the pandemic, is projected to bottom out at around $131 million in early 2021 before recovering.

That rosier outlook for the trust fund means employers won’t need to cough up a so-called insolvency tax — one of three possible unemployment taxes paid by businesses — next year. And that means employers’ overall unemployment tax burden won’t increase quite as much as ESD forecasted in June, when the agency warned of a near-tripling of employers’ tax load — from an average of $317 per worker for 2020 to $936 per worker by 2022.


Employers shouldn’t expect a huge break in taxes. The average per-worker tax bill is now expected to be $346 in 2020, $585 in 2021 and $888 in 2022, according to preliminary ESD estimates.

The tax increases still represent “a significant increase for businesses, but this new forecast improves the outlook considerably,” ESD spokesman Nick Demerice said, adding that the agency still projects needing an insolvency tax in 2022 and 2023.

Further, thanks to ESD’s improved forecast, the agency no longer anticipates having to borrow federal funds to replenish the trust fund.

The developments in the state’s job market came as the nation as a whole saw a modest decrease last week in new jobless claims, which fell 4.3% to 837,000 over the prior week, the U.S. Labor Department reported Thursday.

The nation’s unemployment rate was 8.4% in August, the most recent month for which data is available. Washington’s August unemployment rate was 8.5%, and roughly 328,000 Washingtonians were collecting unemployment benefits as of last week.

Despite the modest improvements in Washington’s unemployment situation, the state has extended a suspension of the requirement for workers collecting unemployment benefits to actively search for work.

In March, Gov. Jay Inslee suspended the requirement and has extended that suspension several times since. His most recent extension, which the Legislature approved Thursday, waives the requirement through Nov. 9, Demerice said.