Unemployment rate rises in Maryland and Virginia in May and holds steady in D.C.

Employment in the Washington region appears to have avoided a sequester-related bruising in May, a Friday report from the Labor Department showed, although the jobless rate rose in Maryland and Virginia and remained high in the District.

Job gains and losses in the area’s contracting industry and government sector did not vary widely from those seen before the automatic federal spending cuts went into effect this year. But the data also did not show especially strong job growth, a sign that the economic recovery is chugging along here but is not in overdrive.

“One would have anticipated a meaningful change in the trajectory of labor market performance in this part of the country,” said Anirban Basu, chief executive of the Baltimore economic consulting firm Sage Policy Group. “For the most part, that just has not happened.”

In Maryland, the unemployment rate rose from 6.5 percent to 6.7 percent as the state added 4,600 jobs. The professional services sector saw the biggest growth, adding 4,700 positions. Maryland also gained 1,800 government jobs. The trade and transportation sector, which includes retail positions, added 2,200 jobs. The construction industry showed the biggest losses, shedding 3,100 positions.

Maryland’s labor force also increased in May, a sign that the uptick in the unemployment rate might be attributable to people beginning to look for work again.

In Virginia, the jobless rate inched back up last month to 5.3 percent from 5.2 percent, which was the lowest level since 2008. The commonwealth lost 1,700 jobs overall. Unlike Maryland, Virginia lost jobs in the industries most likely to be affected by federal spending cuts: Professional services shed 1,200 jobs, and the government lost 1,700 jobs. But those losses weren’t enough to signal that the sequester is a drag on job growth.

Ann Lang, senior economist for the Virginia Employment Commission, said that the May job losses were not a significant backslide. “I wouldn’t put too much weight on one month,” she said. “Over the year, we’re still up 48,200 jobs.”

The District added only 700 jobs last month. Its unemployment rate — consistently higher than the national average — was unchanged at 8.5 percent. Most sectors added jobs, with the largest increases in the leisure and hospitality industry, which gained 1,600 positions.

Hank Huth is one of many in the Washington restaurant business who has been growing his workforce as he detects stronger demand for his products. The Dunkin’ Donuts franchisee has opened four stores in the District this year and plans to add three more. With each store opening, he said, he adds 20 to 25 positions.

“We look at D.C. as a market that has a lot of great growth opportunity,” Huth said. “The stores that we’ve opened, the guest response [is] very, very strong.”

The District also saw gains in professional services, which added 1,100 positions. The government sector lost 1,600 jobs.

The hiring slowdown in the construction sector suggests that the region’s housing recovery might not be fueling job growth as some analysts had expected.

The nation’s unemployment rate increased slightly in May to 7.6 percent as the economy added 176,000 jobs. Jobless rates dropped in 25 states, rose in 17 and were unchanged in eight. Nevada registered the nation’s highest unemployment rate, 9.5 percent. The lowest rate, 3.2 percent, was in North Dakota.

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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