D.C. area posts its weakest job growth since the recession

The Washington area added a paltry 4,800 jobs in the year that ended in February — the bleakest showing in the region since the Great Recession.

Data released Friday by the Labor Department indicate surprising weakness in the professional services sector, which includes the region’s throngs of government contractors. The sector lost 15,100 positions during the year, the largest regional decrease in the category since such data became available in 1991.

“It’s sobering,” said economist Stephen Fuller, who directs the Center for Regional Analysis at George Mason University. “I think it certainly underscores the vulnerability that the Washington-area economy has and has to overcome.”

That vulnerability stems from the region’s deep dependence on federal spending to power its economy. Throughout 2013, uncertainty about the impact of across-the-board federal budget cuts known as the sequester appeared to deter hiring in the federal government and in the contracting industry.

After Congress struck a deal in December to ease the sequester through September 2015, many economists and local business leaders expected hiring to pick up. However, the latest data show no evidence of renewed strength in employment. In addition to the steep losses in the professional services category, the federal government shed 10,800 positions.

The Washington area’s unusually cold and snowy winter might be partly to blame for the weak job growth, Fuller said. Office and transportation closures may have caused some job seekers and hiring managers to postpone their efforts.

Still, Fuller notes, many local industries continued to add jobs despite the weather conditions, so the weak numbers related to government spending are likely have more troubling undertones.

“We are really hurting on our bread-and-butter side of the economy,” Fuller said.

Alan Chvotkin, executive vice president and counsel at the Professional Services Council, said he expects to see greater stability in his industry in 2014 but also continued pressure on hiring.

“From what our member companies are telling us, they’re not laying off people. But as vacancies occur, they’re not rushing to fill them,” Chvotkin said. “They’re bringing different sorts of technology solutions to bear instead of people.”

Despite the current weakness, the regional labor market is likely to improve at least modestly as the year progresses, said Anirban Basu, chief executive of Sage Policy Group, a Baltimore economic consultancy.

“There’s no real reason to believe that, come spring, all of a sudden the local economy will begin to boom,” Basu said. But “the period of dismal job growth will end and give way to a period of moderate expansion.”

At the national level, 175,000 jobs were added in February, and the unemployment rate rose slightly to 6.7 percent. The national unemployment numbers are seasonally adjusted, meaning they can be compared on a month-to-month basis. This set of regional employment data is not seasonally adjusted, so it can be compared only on a year-to-year basis. The Labor Department will release the February unemployment rate for the Washington metro area on April 9.

The Labor Department also released a report Friday that shows how the job market looked at the state level.

In February, the District lost jobs for the fifth consecutive month, shedding 2,000 positions overall. The city saw modest job growth last month in sectors such as hospitality, but it shed jobs in the health services sector and added no jobs in the professional services industry. While the District’s jobless rate held steady at 7.4 percent, its lowest level since 2008, the ranks of the unemployed increased slightly.

Maryland shed 600 jobs overall in February as its unemployment rate dipped from 5.8 to 5.7 percent. The steepest loss was in the construction sector, which shed 3,900 jobs. That decline was partially offset by gains in the hospitality and government sectors.

Virginia had modest job growth in February, adding 4,900 positions. Its jobless rate ticked down from 5 percent to 4.9 percent.

Nationwide, 29 states saw their unemployment rates dip in February. Jobless rates rose in 10 states and held steady in 11 states.

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 economics news.
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