D.C. area sees stronger 12-month job growth, but unemployment rate rises

The Washington region added 48,500 jobs between May 2012 and May 2013, the Labor Department reported, its strongest year-over-year job growth since the one-year period that ended in September 2011.

Even as the region added jobs, its unemployment rate rose from 5.3 percent to 5.4 percent in May as more people began looking for work.

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The professional services industry, which includes the government contractors who were expected to be among the hardest hit by the automatic federal spending cuts known as sequestration, added 13,700 jobs, more than any other industry. That is the largest one-year gain for that sector since 2010-2011.

“It’s not a terrible thing when people are surprised by good news,” said Anirban Basu, chief executive of the Baltimore economic consulting firm Sage Policy Group. “This is precisely what the data offer, surprisingly good news.”

Washington-based technology consulting firm New Signature is one local company that has been hiring in the professional services sector. Chief executive Chris Hertz said the company has added about 30 positions in the past year. He hopes to add about 20 to 30 more workers by January but said it’s been difficult to find workers who have the right skill set.

“Literally, I would make six offers a day if I had the right people here in D.C.,” Hertz said.

Hertz has not noticed any drag from the sequester on his business or on the local labor market. “It’s very competitive right now. We’re having to get very aggressive in our recruiting practice,” Hertz said.

Still, Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, cautions that there are some negative data for the region in the report. For example, metropolitan areas such as Dallas and Houston added more jobs than Washington.

“Diversified economies do better than specialized economies in an expansion period,” Fuller said.

Also, Fuller notes that there is a soft underbelly to the region’s recently strong job growth in the leisure and hospitality sector. That industry, which added 12,400 jobs, tends to pay lower wages than the government or professional services sectors.

Most sectors in the region added jobs between May 2012 and May 2013. The education and health services sector, the area’s biggest source of job growth in 2012, added 7,100 positions. The financial sector added 5,500 positions, while the construction industry gained 1,400 positions.

The government sector added 7,300 jobs. However, the federal government subcategory shed 4,700 positions.

The Labor Department releases seasonally adjusted jobless rates for metropolitan areas, which allows the data to be compared month-to-month. However, the numbers of job gains and losses are not seasonally adjusted, so those numbers must be compared year-over-year.

The jobless rate in this region remains far below the national rate, which ticked up to 7.6 percent in May. The Labor Department is set to release its June unemployment report on Friday.

Jobless rates fell in 253 areas, rose in 86 and held steady in 33. Yuma, Ariz., had the nation’s highest unemployment rate: 30.8 percent. Bismarck, N.D., had the nation’s lowest unemployment rate: 2.4 percent.

 
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