Job Growth in Area Slowed in September

Job growth in the Washington region softened slightly in September, suggesting that the pace of expansion in one of the nation's strongest employment markets has begun to slow, economists said.

The number of local jobs increased by 43,300, or 1.46 percent, in September from the corresponding period last year. The gains were smaller than those reported in recent months. The region added 45,400 jobs in August, a 1.53 percent increase from the comparable period in 2006, and it added 46,400 jobs in July, a 1.56 percent jump.

Because the Labor Department's metropolitan area employment report is not adjusted to take into account seasonal patterns such as holiday retail employment and summer student employment, the most accurate measures are based on year-to-year comparisons.

The Washington area recorded a 3 percent unemployment rate for the month, the fourth-lowest among large metropolitan areas after Phoenix, Richmond and Virginia Beach. The non-seasonally adjusted unemployment rate was unchanged from August and down slightly from 3.1 percent in September 2006. Nationally, the unemployment rate was 4.7 percent.

September is typically one of the strongest months for hiring because school employees return to work. However, troubling economic signs in the local housing sector and potential for inflationary pressure from higher energy prices have kept many companies from expanding at the pace they have in recent years, economists said.

Mark Vitner, senior economist at Wachovia, said local job growth has been decelerating since the first quarter, with weak gains in residential construction and professional and business services.

"With the overall environment less certain, businesses are getting more cautious of hiring workers," Vitner said, "but they are also not wanting to let them go because this is a tight, tight economy."

The number of construction jobs rose by 2,200, or 1.1 percent, from September 2006. Economists said commercial building, which has continued to grow because of the expansion of companies, masked job losses in residential building. In the same month in 2005, for example, the number of construction jobs rose 5.6 percent.

Jobs in professional and business services, which include technology firms and many government contractors, rose by 19,900 jobs, or 2.97 percent, from September 2006. The number of jobs and rate of growth have steadily declined this year. In January, the number of new professional and business services jobs rose by 22,000, or 3.41 percent. Each month the sector produced more than 20,000 jobs except in August and September.