(The Center Square) – A recent report from Moody’s Analytics includes Washington among 22 states in or near a recession, leading some to predict 2026 will be a bad year for job seekers in the Evergreen State.
“This state-level picture mirrors the national trend: the U.S. economy is not in recession, but it is struggling to avoid one,” Mark Zandi, chief economist at Moody’s Analytics, wrote. “This is evident in the job market, as payroll job growth has come to a virtual standstill, and likely will look even weaker after all the data revisions are in. This is consistent with the fact that only a few industries are still adding to payrolls, mainly healthcare and hospitality. Construction, manufacturing, technology, finance, government, and many professional services are shedding jobs.”
State Rep. Travis Couture, R-Allyn, talked with The Center Square about the jobs outlook in Washington.
“The part of the forecast that should concern every Washingtonian is the outlook for jobs. Our state is expected to add only 11,000 jobs in 2025 – barely a blip – and add zero in 2026,” he said. “Moody’s is even analyzing us and saying that we’re one of the states that are near or in a recession.”
Couture continued: “All Washington state constituents are struggling right now. We have some of the highest costs of living in all of the nation, and pretty much every category with gas, groceries, rent, insurance, childcare… Everything seems to be broken, and we’ve been predicting it all along.”
Couture, who is the House Republican budget lead, said despite recent statements from Washington Democrats about resistance to new taxes, he is not optimistic the majority will hold to that.
“You know what they say: Fool me once, shame on you, fool me twice, shame on me. And we won’t be fooled again,” Couture said. “I think the people of the state of Washington were fooled once by Bob Ferguson, and they won’t be fooled again.”
Couture was speaking of Gov. Bob Ferguson signing the largest tax increase in state history at the conclusion of the 2025 session, despite statements upon taking office that he would work with Republicans to hold down tax hikes.
“We’re going to have to hold his feet to the fire. By law, the governor can’t propose going into a short session [with] a budget that has new revenues,” he explained. “But that doesn’t mean his Democrat colleagues in the House and Senate can’t do so. So, we’re going to be keeping a lookout for that. We just cannot tax anymore. It’s non-negotiable.”
Meanwhile, the head of the Association of Washington Business, the state’s largest business organization, also has a gloomy economic outlook for Washington, absent an immediate course correction.
AWB CEO and President Kristofer Johnson shared takeaways from his organization’s fall Washington Employers Survey.
“We asked them about the impacts on their business of the largest tax increase in state history. We asked them about all of that. And what that survey data told us is some real concern about the economy in 2026, and the optimism that was in the economy at the beginning of ’25 has basically eroded,” he said.
When it comes to job prospects for Washington in the upcoming year, Johnson said survey respondents did not share good news.
“The outlook for new hires is not strong in 2026. And then there’s just real concern as we go into the holiday season and knowing how important retail sales are, how much do you and I all go spend this holiday season, and what that’s going to mean on the economy going to next year,” Johnson noted. “So the number one issues were cost of tax and regulations, followed by the cost of health care, followed by taxes in general for employers.”
Couture said that while Republicans will do all they can to fight increased taxes, there is only so much they can do, given that Democrats hold large majorities in both chambers of the Legislature.
“Democrats have been in charge here for 40 straight years. Longer than the Israelites were lost in the wilderness, so maybe if we were in charge, we wouldn’t have crises after crises to deal with in our state right now, and people wouldn’t be suffering,” he speculated.
Johnson said his organization will focus on convincing policymakers to make Washington a more welcoming state for businesses.
“How do we make this an easier state to start, grow and keep an employer in the state of Washington?” he asked. “I would like to make sure that Washington’s on everyone’s radar map as a place to go and locate a business and grow the economy. Unfortunately, I think that’s not the environment we’re in today.”
Ferguson is working on his 2026 supplemental budget, which is due next month. He said in a Nov. 18 statement that budget challenges continue for the state.
“I will be proposing a balanced budget that preserves core services but still makes investments in important areas,” Ferguson wrote.
