Unemployment Levels in Area Highest Since the Mid-1990s, Economists Say

The percentage of people who are unemployed in the District, Maryland and Virginia rose to the highest levels in more than 10 years, exceeding the jobless rate of the last recession, in 2001, experts said yesterday.

Data from the Bureau of Labor released yesterday showed that the District's rate reached 8 percent in November, up from 7.3 percent a month earlier. Maryland's rate increased from 4.9 percent in October to 5.3 percent last month, and Virginia's rose from 4.4 percent to 4.8 percent.

The problem could get worse. D.C. Chief Financial Officer Natwar M. Gandhi projected yesterday that the city's unemployment rate could soar to almost 10 percent by 2010, the highest level in almost three decades.

During the past few months, the mid-Atlantic region has lost thousands of jobs in sectors including construction and retail. Last month, according to analysts, hundreds of workers were laid off from factories in the area, including a Goodyear plant in Danville, Va., and GM and Chrysler plants in Delaware, which employ Maryland residents.

The last time the figures were so poor for the District, Maryland and Virginia was in the mid-1990s, said Scott Hoyt, senior director of Moody's Economy.com.

The data are "confirming that this recession is more severe than the one we saw at the beginning of the decade," Hoyt said.

The Washington area has been "insulated by ties to the federal government," he said. "That can only go so far."

The Washington region was among only four large metropolitan areas where job growth exceeded losses, analysts said. But they predicted that the situation will be reversed next year.

"Virginia still has just a little bit of job growth," said William F. Mezger, chief economist with the Virginia Employment Commission. "It will probably go negative when we go into the new year."

In the District, the bad news came in a city budget briefing by Gandhi, who confirmed a Washington Post report that the city faces a $127 million budget gap this year.

The shortfall, which represents 2.5 percent of the city's $5.3 billion budget in local funds, was caused largely because of declines in the commercial property market related to the credit crisis on Wall Street.

Gandhi also said unemployment would reach 9.8 percent in 2010, the highest percentage since the early 1980s. Robert Ebel, the District's chief economist, said the unemployment rate hovered between 10 and 11 percent in 1982 and 1983. In the 1990s, the highest it reached was 8.8 percent, Ebel said.