D.C. area jobless rate steady at 4.8 percent as employers grapple with federal spending cuts

The Washington area jobless rate held steady at 4.8 percent in April, the Labor Department reported Wednesday, even as federal budget cuts have pushed the government and local contractors to keep trimming jobs.

The regional labor market showed some signs of improvement in April, with Maryland, Virginia and the District adding jobs.

“The most recent data were a bit more upbeat and suggest that the local economy is beginning to adjust to the reality of sequestration, higher mortgage rates and other key economic factors,” said Anirban Basu, chief executive of Sage Policy Group, a Baltimore economic consultancy.

Still, on a year-over-year basis, the Washington metropolitan area has shown only meager job growth, an indication that there has been heavy drag on the labor market from the federal budget cuts known as sequestration. The federal government shed 11,000 positions between April 2013 and April 2014. The professional services industry, which counts about 700,000 workers and includes government contractors, lost 8,600 jobs during the same period.

Marcia Call, chief executive of Alexandria-based recruiting firm TalentFront, said her clients in government contracting are still keeping a lid on hiring.

“They really have been hard hit by what’s going on on Capitol Hill,” Call said. In fact, she said, that’s why her relatively young staffing company has not developed much business in that market.

But Call said she sees a sharply different picture among small nonprofit organizations and technology companies, which now appear eager to grow their staff.

“People have waited a really long time to invest in staffing, and so the decision is not taken lightly,” Call said. “They probably double-stacked a lot of work on people, and they’re finally feeling like they can invest.”

During the one-year period that ended in April, the region’s greatest job gains came from the retail industry, which added 8,300 positions. The leisure and hospitality sector gained 6,300 positions, the second-largest increase.

“That’s a function of consumer spending and business spending on travel,” Basu said.

Other sectors that saw job gains include education and health services, which added 5,500 positions, and financial activities, which added 3,100 positions.

The information sector lost 2,300 positions, while the construction industry shed 100 jobs.

The unemployment rate in the Washington area has hovered at 4.8 percent since February. Meanwhile, the national jobless rate has fallen from 6.7 percent to 6.3 percent. While analysts largely attribute the drop in the national unemployment rate to a shrinking labor force, the Washington area labor force has been growing, a sign that perhaps more people here have renewed confidence in the economy and have begun looking for work again.

Capital Business is The Post’s weekly publication focusing on the region’s business community. For more Washington business news, go to www.capbiz.biz.

Sarah Halzack is The Washington Post's national retail reporter. She has previously covered the local job market and the business of talent and hiring. She has also served as a Web producer for business and economic news.
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