By Cecilia Kang and Kendra Marr
Washington Post Staff Writers
Saturday, October 27, 2007

Unemployment in Northern Virginia fell to 2.1 percent in September from 2.3 percent in the corresponding period last year as strong employment growth in high-tech and government contracting businesses continued to fuel one of the nation's strongest job markets.

The number of local jobs rose 1.7 percent, or 21,800 jobs, with professional business services leading the way, according to a monthly report of U.S. Labor Department data compiled by the Virginia Employment Commission. Construction jobs, which had softened earlier in the year, showed a recovery, up by 600, as activity in the commercial real estate market made up for any losses in residential building.

Economists said that even with AOL's recent announcement that it will cut 750 Washington-area workers, demand for jobs remains acute.

"Yes, you have layoffs of individual companies, but the overall economy is still growing, so people tend to get absorbed quickly," said William F. Mezger, the commission's chief economist.

Unemployment rates remain low through the Washington region -- good for workers but tough for employers trying to fill vacancies. In the Maryland suburbs, unemployment rates ranged from 2.7 percent in Montgomery and Howard counties to 3.9 percent in Prince George's. The District reported an unemployment rate of 5.8 percent in September.

In Virginia, Arlington County posted the lowest unemployment rate, at 1.8 percent. Fairfax County ranked fifth in Virginia, with 2 percent unemployment. Loudoun County, which had been ranked first at the start of the year, fell to 11th, with 2.1 percent unemployment.

Mezger said Loudoun's fall represents earlier layoffs at AOL and softer employment in residential construction there -- one of the fastest-growing counties in the region.

This month, AOL announced that it would cut 20 percent of its global workforce as part of a restructuring plan that will also move its corporate headquarters to New York from Dulles.

Several headhunters and economists said the former AOL workers should find it easy to locate new jobs, though they may not pay as well as the Internet giant did.

The tight job market puts pressure on employers to raise salaries and benefits to woo hires, and vacancies often take longer to fill.

It took a year to fill four Web development jobs at the Motley Fool, an online finance education company, said Kevin Smith, head of a Web development division at the Alexandria company.

Qloud, a music sharing Web service in Silver Spring, is having a difficult time finding a systems operator and a Web developer.

"There's a lot of people with technical knowledge in areas from federal and military technology firms," said Qloud co-founder Toby Murdock, a former AOLer. "But we're looking for people with specific skills and interests in consumer Internet."

The job market has companies like NetGain of Reston, a telecommunications services company, turning to younger candidates, some straight out of school, to fill their ranks. Two of the three hires the company has made this year were recent graduates of George Mason University, and it plans to target more novice candidates for three more slots it is trying to fill in software development and sales.

In Northern Virginia, some of the strongest growth is in the education and health-care sectors. September also marks the return of teachers, administrators and other school employees, and schools are often the largest employers in cities and some counties. The number of jobs in education rose 6.7 percent from September 2006.

Economists said there was little evidence that the mortgage-industry crisis had hit financial services in Northern Virginia, which rose 1.3 percent, or 900 jobs, from last year.

The final three months of the year typically mark the strongest period for job growth, said Mezger, who predicts unemployment will remain low and employment will increase.