Washington area unemployment rate reamins at 5.4 percent in August

October 3, 2012

The unemployment rate in the Washington area remained at 5.4 percent in August, even as jobs were added across a broad range of sectors, according to numbers released Wednesday.

The professional services sector, the backbone of the regional economy, added 9,500 jobs between August 2011 and August 2012, the Labor Department said.

Despite that increase, the threat of federal budget cuts associated with the “fiscal cliff” is causing trepidation among local businesses in this industry.

“Companies have been cautious to hire, and hire primarily in revenue-producing positions,” said Alan Chvotkin, executive vice president of the Professional Services Council.

The education and health services sector, which has recently been an important engine for job growth in the region, added 11,600 jobs during the period.


“That is going to be a continuing source of growth,” said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. Fuller said that a swell of aging baby boomers is creating more demand for a wide variety of medical care positions.

The leisure and hospitality sector also expanded, adding 8,000 jobs. The boost, Fuller said, comes from local residents making use of disposable income, not from a rise in tourism.

“We have a fairly large population that continues to go out and eat and go to the theater and play golf,” among other recreational activities, Fuller said.

Other sectors that saw gains include financial activities, which added 3,900 jobs; information, 2,300; and government, 2,900.

The construction sector added 4,100 jobs in August, but economists said that growth is likely to sag .

In Washington, “I do expect quite a drop-off in federal construction,” said Kenneth D. Simonson, chief economist for Associated General Contractors of America, as spending cuts loom. Without these government projects, he said, it might be hard for the sector to maintain its strength.

The Labor Department releases seasonally adjusted unemployment rates for metropolitan regions, which allows for month-to-month comparisons. But the number of job gains and losses are not seasonally adjusted, so only year-to-year assessments can be made for these figures.

The Washington region has added 38,200 net jobs since August 2011. The private sector has added 35,300 jobs.

“The sectors have rebalanced themselves so that they have the workers and the capacity to meet demand. And they would grow more if demand was greater,” Fuller said.

Retail was one area that did not perform strongly in August. That sector lost 5,200 jobs.

The jobless rate in the Washington region remains well below the national rate, which was 8.1 percent in August. The Labor Department on Friday will release national unemployment data for September, which will be closely watched by President Obama’s and Mitt Romney’s campaigns as each candidate tries to convince voters that he is best equipped to boost the economy.

Economists surveyed by Bloomberg News forecast that the report will show that in September, the jobless rate the United States rose to 8.2 percent and the economy added 115,000 jobs.

Unemployment rates fell in 325 of 372 metropolitan areas. Rates rose in 40 areas and stayed the same in seven.

El Centro, Calif., and Yuma, Ariz., registered the nation’s highest jobless rates. Unemployment was at 29.9 percent in each of those border towns. Joblessness was lowest in Bismarck, N.D., where the rate was 2.5 percent.

Sarah Halzack is a reporter and Web editor for Capital Business. She covers the local job market and the business of talent and hiring. Previously, she was a Web producer for the Post's daily business and economic news section. She occasionally writes for other sections at the Post, most frequently in the form of dance reviews, dance features, book reviews and obituaries.
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