By V. Dion Haynes
Washington Post Staff Writer
Wednesday, January 28, 2009
Unemployment in December rose in all 50 states and the District for the first time in 33 years of record-keeping, according to government data released yesterday, while consumer confidence in the economy tumbled once more in January after reaching historically low levels last month.
Bureau of Labor Statistics data offered more evidence of an economy growing increasingly fragile, even in the District, Maryland and Virginia, which traditionally have been sheltered from dramatic job losses because of the presence of the federal government. Despite that, 24,500 people in Virginia lost their jobs in December when the unemployment rate jumped to 5.4 percent from 4.8 percent.
The jobless rate in the District soared nearly a point in December, to 8.8 percent from 8.0 percent the previous month. Maryland's unemployment rate rose to 5.8 percent from 5.3 percent. The ranks of the unemployed grew by 9,000 in Maryland and 2,800 in the District.
Like the rest of the country, the District and the two states suffered heavy losses in manufacturing, hospitality and especially retail. For instance, Richmond-based Circuit City, the nation's No. 2 electronics retailer, laid off 800 after its November bankruptcy filing and intends to cut an additional 34,000 jobs across the country when it shuts down all of its 567 stores in March. Hundreds more cuts are expected, with announcements yesterday of job cuts at Minneapolis-based Target and a loss of 650 jobs at Volvo's truck assembly plant in Dublin, Va.
The District's unemployment rate is well above the national rate of 7.2 percent. City officials said they expect it to climb to 10 percent by next year.
The District's "really does mirror national trends in the sectors where nationally we're seeing job losses," said Joseph P. Walsh, acting director of the city's Department of Employment Services, adding that 1,300 jobs were lost in professional and business services, 200 in construction, 100 in financial services and 100 in hospitality. "The District isn't immune to the forces hitting the [national] economy."
This week, several companies, including Caterpillar, Pfizer and Sprint Nextel, announced that they were cutting more than 55,000 jobs across the country because of the slowing economy. Conference Board data released yesterday illustrate the connection between job losses and consumers' dimmed faith in economic conditions.
Consumer confidence declined to 37.7 in January from 38.6 in December, which already was the lowest reading since the index began in 1967. The nonprofit research group found that more people feel business conditions are poor and fewer expect their incomes to increase.
Those sentiments were underscored by predictions of dismal retail sales this year by the National Retail Federation. Yesterday NRF estimated that sales would dip 0.5 percent this year, the first decline since the trade group began tracking the figures in 1995. The bleak outlook was another sign of American shoppers' reluctance to spend during the recession.
"We are not optimistic about consumer spending in the near-term," said Rosalind Wells, NRF chief economist.
The group predicted sales will drop 2.5 percent during the first half of the year from the comparable period in 2008. The third quarter is expected to decline by 1.1 percent before turning a positive 3.6 percent during the fourth quarter.
Fewer shoppers has meant fewer jobs. In Virginia, thousands of jobs were cut by Reynolds Food Packaging, LandAmerica Financial Group, Qimonda North America, a Thomasville Furniture plant and numerous retailers, said William F. Mezger, chief economist for the state's Employment Commission.
"Normally, Virginia adds 25,000 jobs during the holiday. This year, it looks like it was 12,000 to 15,000," Mezger said. Besides having fewer new hires, he added, retailers are putting more employees on furlough because of weak sales.
Eric M. Seleznow, executive director of the Maryland Governor's Workforce Investment Board, said retail jobs dropped by 3 percent from December 2007 to December 2008. The losses, he said, were triggered in part by closings of KB Toys, Circuit City and Filene's stores.
Maryland, like other states, is investing more money in job retraining programs, Seleznow said. In Baltimore yesterday, 700 policymakers from around the country attended a conference on workforce training -- 200 more than were expected, he said.
"People are looking for any new strategy or idea to get people redeployed," Seleznow said.
Staff writer Ylan Q. Mui contributed to this report.