The Washington Post

Area unemployment rate dropped to 5.6% in January

The unemployment rate in the Washington region fell in January to 5.6 percent from 5.8 percent the month before, according to a Labor Department report released Friday, driven down in part by sharp job gains in the private sector powered by new hotels and restaurants.

The report shows that the area’s economic recovery is steadily gaining strength, analysts say, and that the dip in employment levels last year wasn’t as harmful as they initially thought. That’s largely because, until recently, new businesses created last year weren’t included in the Labor Department’s survey of employers. For example, a Hilton Garden Inn opened last summer at 1225 First St. NE, hiring nearly 100 people for the hotel and restaurant.

Analysts say new hotels and restaurants throughout the region helped fuel an overall net gain of 12,500 jobs in the 12-month period that ended in January. In the 12-month period that ended in December, the Labor Department recorded an additional 5,500 jobs in that sector.

“We are big believers in the long-term economic vitality of the Washington” region, said Corry Oakes, chief executive of OTO Development in Spartanburg, S.C., which built the new Hilton hotel. “There’s a tremendous diversity of demand generators, including government, the private sector, education and tourism.”

Before making its revision, the Labor Department last year reported that the region lost a net of 7,900 jobs in the 12-month period that ended in July. The revision shows that 14,300 jobs were added during that period.

Businesses “had to have existed in December 2010 to be part of the 2011 sample,” said John McClain, deputy director of the Center for Regional Analysis at George Mason University. “There are a lot of new companies out there” that were counted only in the agency’s recent revision.

Robin A. McClain, spokeswoman for Destination D.C., the city’s tourism agency, said it was too early to tell whether the unseasonably warm winter temperatures have encouraged a spike in tourism. But she did note that hotel occupancy was up 7 percent in the period from November to January, compared with previous years.

“More tourists mean more jobs here,” she said. “These are positive signs for the marketplace.”

The region added 28,700 jobs in the 12-month period that ended in January. Besides leisure and hospitality, job gains were reported in construction, 6,100 positions; financial activities, 3,300; and education and health, 9,700.

Sectors that lost jobs were retail, down 4,100 positions; manufacturing, down 1,200; information, which includes media, down 1,100; federal government, down 2,300; and professional and business services, down 2,500.

In recent months, employment in the professional and business services sector surged, analysts say, reflecting the typical boost in contract awards at the end of the government’s fiscal year.

George Mason’s John McClain said he believes that hiring has returned to levels before last fall, when government contracting suffered under the uncertainty over federal sp.

The Labor Department reports on the unemployment rates in its 372 metropolitan areas every month. The Washington metropolitan area contains the District and the nearly 20 counties and jurisdictions in Northern Virginia and suburban Maryland that surround the city. In a separate release that typically comes two weeks afterward, the Labor Department issues a report on unemployment rates in each of the 50 states and the District.

The region’s unemployment level is well below the nation’s jobless rate of 8.3 percent for January.

Unemployment dropped in 345 of the 372 metropolitan areas across the country, rose in 16 and remained steady in 11.

The region surrounding El Centro, Calif., with a 26.4 percent rate, had the highest unemployment level in the nation. The areas of Bismarck, N.D., and Lincoln, Neb., had the lowest levels — 3.8 percent.



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