Region’s unemployment rate falls in November

January 8, 2012

The jobs picture in the Washington region is showing signs of perking up for the first time in several months, reflecting a range of positive recent indicators pointing to steady improvement in the national economy.

Unemployment in the region fell to 5.9 percent in November from 6.1 percent the month before, according to a Labor Department report released last week, after a tumultuous year during which the rate steadily shot up and then stabilized at a higher level.

The improvement in the region’s unemployment rate, which had risen steadily amid the debt ceiling debacle and euro crisis, adds to a growing body of encouraging data on holiday retail sales and the housing market. The Labor Department also reported last week that the nation added more than 200,000 jobs and the U.S. unemployment rate in December dropped to 8.5 percent from 8.7 percent the month before.

During the 12-month period ending in November, the Washington region added 7,400 jobs in the private sector. And after losing public sector jobs for much of the year, it gained about 3,000 state and local government jobs.

Still, there are caveats: Metropolitan Washington lost 2,000 federal jobs from November 2010 to November 2011, decreasing the overall net employment gain to 1,680. Moreover, the area’s retail and information sectors experienced sizable losses.

The decrease of 5,600 retail jobs could result from a “structural change” in the sector, said John McClain, deputy director of the Center for Regional Analysis at George Mason University, with “people buying more online.”

Overall, though, “we’re certainly headed in the right direction,” McClain said. In the national and local economies, he added, “a lot of things are positive.”

One encouraging sign to analysts is the growing strength of perennially weak sectors. Local and state governments, which have been hemorrhaging jobs because of budget cuts, gained 3,000 positions from November to November, McClain said.

Governments “are backfilling positions shed over the last three years,” said David Robertson, executive director of the Metropolitan Washington Council of Governments.

“They are hiring for absolutely essential positions,” Robertson added. “If a more senior person making $80,000 retires, you fill it with one person making $50,000 and another making $30,000.”

Construction, which lost 2,200 jobs from October to October, gained 400 in the 12-month period ending in November.

“We are on an upward trend. I do see it continuing, but at a slow rate,” said Paul Mella, senior vice president of Dulles-based Dynalectric Co., noting that the firm has been hiring more electricians.

“There’s been a surge in the [housing] market,” Mella added. “Young professionals are entering the market and can’t afford homes. The high-rise rental market is hot.”

The Labor Department recently began providing seasonally adjusted unemployment rates for metropolitan areas, allowing for month-to-month comparisons. But the employment data is not seasonally adjusted so only year-to-year comparisons of job gains and losses can be made.

The professional and business services sector was the biggest driver, posting a net gain of 7,400 positions from November to November. Job placement experts attributed the increase to employers’ increasing willingness to hire more temporary workers.

“There’s a growth in contract labor — there’s no doubt about that, and I suspect we’ll see more of that in 2012,” said Paul Villella, chief executive of HireStrategy, a Reston-based recruiting firm.

“We’re seeing more temp-to-permanent hiring,” Villella added. Employers are saying, “‘Let’s try it out.’ Then they’ll commit to the permanent direct employment. That was definitely up, particularly in the second half” of the year.

The financial activities sector expanded by a net of 5,800 jobs. “We’re up 108 positions from December to December,” said Bernard H. Clineburg, chairman and chief executive of Cardinal Bank. He said the hiring is in response to an influx of customers transferring from larger banks.

Unemployment rates dropped in 351 of the 372 metropolitan regions nationwide, according to the Labor Department. It rose in 16 areas and remained steady in five.

El Centro, Calif., posted the highest rate — 27.2 percent. Bismarck, N.D., had the lowest — 2.8 percent.

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