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Regional Economy Has a Split Personality

By Zachary A. Goldfarb
Washington Post Staff Writer
Monday, June 23, 2008

The big defense company Lockheed Martin of Bethesda has nary a concern about the national economic downturn. It is hiring -- not laying off -- employees.

"Our hiring patterns nationwide and in the Washington area are totally unaffected by the state of the economy," said Ken Disken, senior vice president for human resources.

In another corner of the Washington economy, Renee Warren, 49, a Gaithersburg waitress who has been staying home to take care of her disabled husband, saw her lights go dark recently because she couldn't pay her electricity bills, which have reached $400 a month.

"It's just ridiculous," Warren said. "You can't live. I can't even get shoes for my husband, clothes, the things we need because of the bills."

The sagging national economy is widening the gap locally between people who work for the giant base of consulting and technology firms that rely on the government for revenue and lower- and middle-income people in jobs exposed to the downturn, such as retail and construction.

As some companies around the country pull back and lay off workers, government services firms are keeping overall rates of employment high in the Washington area. But people of modest means are feeling pinched by increases in the prices of everyday goods, especially gasoline and utilities. These costs are rising faster in the Washington area than in many other places.

A government report released last week showed that prices for consumer goods in the Washington-Baltimore region are increasing faster year over year than the national average. Prices in May jumped 5 percent, compared with 4.2 percent nationwide, the Bureau of Labor Statistics said.

The heart of that difference was energy -- in particular the cost of powering one's home, which jumped 28 percent, compared with an 11 percent national increase.

"The Washington area is still generating new jobs every month. We're not looking like the national economy there, which has lost jobs for the last five months," said Stephen Fuller, director of George Mason University's Center for Regional Analysis. "The strength of our economy seems to be holding, and the consequences of the slowdown in the housing and financial sector haven't spread like it seems as they have in the national level."

But Fuller added a caution.

"People who are young, have children and a lot of debt, and jobs that pay below the average are feeling the full brunt of this increase in food prices and energy prices, and they have no cushion," he said.

While soaring energy prices are battering the entire country, it appears the effect is being amplified in the Washington area -- and especially in Maryland.

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