Despite inflation and another decline in the national GDP, Island County’s labor market remains strong — for now.

Island County’s unemployment rate has seen only small increases in the past couple of months, rising to 4.5% in May and 4.6% in June. The rate in April was 4.4%.

Current numbers are still better than they were at the beginning of the year, when unemployment hovered around 5% from January through March.

“It is an increase, but it’s going to fall in that margin of error so it’s virtually unchanged,” said Anneliese Vance-Sherman, a regional labor economist for Washington state’s Employment Security Department. “Because it’s not seasonally adjusted, we do see fluctuations over the course of the year.”

This time last year, the unemployment rate was 5.7%.

The current rate is comparable to pre-pandemic numbers. In May and June of 2019, the rate was 4.8% and 5.4%, respectively. The rate is dramatically down from the pandemic-related high of 16.5% Island County experienced in April of 2020.

For the state of Washington, the seasonally adjusted unemployment rate remained at 3.9% from May to June and gained 2,500 jobs in June.

Nationwide, fears of a recession were stoked by the decline in the gross domestic product for two consecutive quarters. Economists, however, say the labor market data for job growth, rising wages and low unemployment rates indicate that recession is not here yet.

Vance-Sherman said that recession appears to be inevitable, but it is still too soon to know when it will happen or what exactly it will look like. She pointed out that the state historically has entered into recession a little later than the nation as a whole does.

Island County has a small population, so it does not take a dramatic change to move the needle, she said. Another thing to take into consideration is the fact that a number of Island County residents are employed in different counties.

“Even if we’re seeing slowing job growth, a lot of the jobs that Island County residents benefit from are in other counties,” Vance-Sherman said. “So it really does get complicated with the commuting piece.”

She said she thought that the slight increase in unemployment in Island County could be explained by an unusually cold spring.

“We had some unseasonably cold and rainy temperatures that would have affected industries such as leisure and hospitality and to a certain extent retail trade, just because people were not getting out as much,” she said.

Retail trade has also been slowing down in recent months due to inflation.

The Seattle-area consumer price index, a measure of inflation, rose 10.1% in the last 12 months, according to the U.S. Bureau of Labor Statistics. Over that period, food prices increased 10.3% and energy prices rose 31.5%, largely due to the uptick in gas prices.

“Wages are increasing but not keeping pace with inflation, so that’s one concern we’re seeing,” Vance-Sherman said.

Despite all this, the labor market for Island County remains strong. In fact, Island County recovered more quickly after the pandemic than the neighboring counties of Whatcom, Skagit and San Juan. Leisure and hospitality were impacted to the greatest extent due to COVID-19 and have had a slow recovery.

“When I look at this region, Island County was the first one to see significant recovery in leisure and hospitality compared to all the other counties I cover,” Vance-Sherman said.

She attributed that to the fact that people were able to work from home at their residences and therefore able to support local businesses. Island County has about 100 more jobs in leisure and hospitality than there were last year.

“I think that’s a really interesting Island County-specific story that I’ve seen showing up in the data,” she said.

Along with that, she said that the Navy base has a stabilizing presence on the economy and helped Island County recover from the COVID recession.