Automatic federal spending cuts have put many businesses in the Washington area in a cautious posture, but the first state-level unemployment report since the cuts went into effect offers little evidence that the sequester rattled the region’s labor market in March.
According to a report released Friday by the Labor Department, the unemployment rate in the District dropped to 8.5 percent in March, compared with 8.6 percent in February. Virginia’s jobless rate dipped from 5.6 to 5.3 percent, while Maryland’s rate was unchanged at 6.6 percent.
The professional services sector, which includes the legions of government contractors in the area, did not show a fresh pullback. In Maryland, the sector added 3,500 jobs, the largest one-month gain it has seen in at least a year. While this category shed jobs in the District and Virginia, the losses were not markedly different from those seen on a month-to-month basis in this sector over the past year. The District lost 100 professional services jobs, while Virginia lost 3,000.
The job gains and losses in the federal government sector also did not differ sharply from the patterns seen earlier this year. Maryland lost 400 jobs in this category, while the District lost 500. In Virginia, 500 positions were added.
Stephen Fuller, director of the Center for Regional Analysis at George Mason University, said he thinks careful planning by government employers has helped prevent deeper losses.
“I’m impressed by how they’ve managed to sidestep or to mitigate what they knew was coming down the pike,” Fuller said.
KEYW, a Hanover-based contracting company, said the sequester has not shaken up its hiring strategy.
“We’ve maintained status quo,” said Jennifer Drury, the firm’s recruiting director.
KEYW has more than 150 job openings it is working to fill, mostly in technical positions. While Drury has not adjusted her human resources plan, she said she has noticed that she has received more job applications since the sequester began. Many of those applications came from people who are employed in the contracting industry but are looking for other opportunities in case their job is cut, she said.
Maryland added 4,700 jobs overall. The state’s greatest gains came from the professional services sector and the construction industry, where 2,800 jobs were added.
The District, which lost 500 jobs overall, saw its biggest increase in the leisure and hospitality sector, where 800 positions were added in March. That sector has recently been a strong driver of job growth throughout the region.
Virginia also saw its largest job gains in the hospitality industry. That sector added 1,900 jobs in the commonwealth in March. Overall, Virginia shed 5,700 positions last month.
Unemployment rates fell in 26 states, rose in seven states and held steady in 17 states. With a rate of 9.7 percent, Nevada had the nation’s highest joblessness. North Dakota’s jobless rate, 3.3 percent, was the lowest, as it has been every month since March 2009.
The national unemployment rate slipped to 7.6 percent in March, even though the economy added only 88,000 jobs.