Area unemployment for July remains at 5.4%

August 29, 2012

The monthly unemployment rate in the Washington area held steady at 5.4 percent in July, according to a report released Wednesday by the U.S. Labor Department.

The report gave a mixed assessment of the regional economy over the past year, with the private sector gaining jobs as the government shed them. From July 2011 to July 2012, the education and health-services sector and the leisure and hospitality sector added 13,000 jobs and 8,500 jobs, respectively, building upon the strength they have shown all year.

But job losses in the government sector and under-performance in professional services over the past 12 months could signal that the economic recovery is not on solid footing.

“That couplet should be a warning to local business and government leaders,” said Stephen Fuller, director of George Mason University’s Center for Regional Analysis. “That is what drove our economy. It’s been our bread and butter, and it’s limping.”

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

The Washington area has added 24,300 net jobs since July 2011. The private sector has added 36,800 jobs, while the government lost 12,500 positions during the same period.

Experts say anticipated congressional negotiations over the federal budget and tax policy are fueling uncertainty among local employers.

“There’s still that specter of that fiscal cliff in 2013 hanging over everyone’s head. Its effects are being felt now,” said Daraius Irani, director of the Regional Economic Studies Institute at Towson University.

Fuller said these concerns might be weighing especially heavily on the professional and business-services sector, which mainly employs federal contractors who depend on the government for work.

Sectors that lost jobs included retail, down 3,900, and information, down 1,700.

Other industries saw modest gains, including financial activities and construction, which each added 4,300 jobs.

Fuller cautions that the report might not be an entirely accurate snapshot of the region’s employment, as many businesses have been turning to part-time workers to fill vacancies. Part-time workers are largely not counted in this data set.

The Washington area jobless rate is significantly lower than the national rate, which rose to 8.3 percent from June to July; the economy added 163,000 jobs that month.

Nationwide, unemployment rates dipped in 305 of the 372 metropolitan areas that the Labor Department tracks. Rates rose in 52 areas and remained the same in 15.

The border town of Yuma, Ariz., has the country’s highest unemployment rate: 31.2 percent. Bismarck, N.D., has the lowest: 2.5 percent.

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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