Summer slowdown: New data piles more misery on Washington area labor picture

August 27, 2014

One week after new state-by-state employment data threw cold water on hopes of a summer rebound in the Washington-area labor market, federal officials Wednesday served up yet another round of job numbers, this time broken down by metropolitan region.

Cue up a second bucket of cold water.

Hiring in the Washington metropolitan region slowed in the one-year period ending in July compared with the same figures the month prior, with firms adding 19,600 jobs, down from 26,300 jobs added in the year ending in June, according to the Labor Department.

Unemployment in the region, based on non-seasonally adjusted figures, edged up from an upwardly revised 5.3 percent in June, to 5.4 percent in July, while the ranks of the jobless expanded from 172,500 individuals to 176,400. Conversely, unemployment rates dropped in 348 of the 372 metropolitan areas monitored by the Labor Department.

“I think we can conclude that the Washington-area economy continues to recover, but that the recovery is no longer taking place as quickly as it is in other parts of the country.” Anirban Basu, chief executive of Baltimore-based Sage Policy Group, said in an interview. He says that’s “likely to continue to be the trend going forward.”

Some parts of the region seem to be holding up better than others, though — and they aren’t necessarily the ones you would expect.

Over the past year in Montgomery County, for example, the number of employed residents has declined by 3,400, according to the household data also released by the Labor Department on Wednesday. During the same period, Basu said, the number of Fairfax residents with a job rose by nearly 11,000 — a pattern he called “counterintuitive.”

“Conventional wisdom is that Northern Virginia has been hit harder by sequestration because sequestration has disproportionately affected the Department of Defense and its contractors,” Basu said. “It seems that was true for a time, but that seems to be changing.”

After June numbers gave the region some hope for a mid-year turnaround, it’s starting to look like — as the first several months of the year suggested — this may be another bumpy year for the region’s economic recovery.

Last week, labor officials reported that Maryland suffered the second-most job losses in the country in July, shedding 9,000 positions. A large share of the losses came from the government and health and education sectors, pushing unemployment in the state from 5.8 percent in June to 6.1 percent.

Meanwhile, the District’s unemployment level in July halted its recent slide, holding steady at 7.4 percent, while Virginia’s inched up from 5.3 percent to 5.4 percent in July. And while D.C. and Virginia employers both added jobs, not a single industry posted gain in all three local jurisdictions.

“Washingtonians have been accustomed to having one of the strongest economies in the country,” Basu said. “However, while the balance of the nation appears to picking up economically, the Washington metropolitan area seems to be slowing down.”

Capital Business is The Post’s weekly publication focusing on the region’s business community. For more Washington business news, check out www.capbiz.biz.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he runs the On Small Business blog.
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