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Unemployment Falls Fraction in District; Maryland, Virginia Uptick Slows

SOURCE: Bureau of Labor Statistics | The Washington Post - April 18, 2009
By V. Dion Haynes
Washington Post Staff Writer
Saturday, April 18, 2009

Unemployment last month dipped slightly in the District and slowed its upward trend in Maryland and Virginia, according to government data released yesterday. But some officials and analysts disagreed on whether the numbers are a harbinger of recovery or an indication that more unemployed people have become discouraged and simply stopped looking for work.

The District's unemployment rate, which soared in recent months and was on the verge of reaching 10 percent, made an unexpected turn in March by dropping to 9.8 percent from 9.9 percent in February. Across the country, unemployment rose in all but four states and fell only in North Dakota and the District.

Bureau of Labor Statistics data also show that Maryland's unemployment rate rose to 6.9 percent from 6.7 percent and Virginia's to 6.8 percent from 6.6 percent.

The direction of the March rate in the District and pace of the increases in Maryland and Virginia stand in stark contrast to the sharp jumps in unemployment that occurred as recently as February.

The March numbers are "an indication that the nosedive we were seeing is being halted now -- it's slowing down," said Mohammad Iqbal, regional economist for IHS Global Insight. "That means the recovery may happen as early as the second half of this year."

But Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, said the number of people who have left the labor force in the three jurisdictions is higher than the number of people who joined the ranks of the unemployed. He said, based on his estimate of the BLS data, that 2,600 people in the District, 5,900 in Maryland and 7,100 in Virginia are not showing up in the numbers.

"It could be that some of the long-term unemployed have quit looking or the newly unemployed are so discouraged they're not looking," Fuller said. They're thinking, " 'I'm not going to get a job, why should I try?' "

The District lost about 700 jobs in March, according to the city's Department of Employment Services, including 600 from professional and business services and 100 from the federal government. But it also added 1,100 jobs in sectors such as education and health services, trade utilities, and leisure and hospitality.

"The fact that the rate didn't go up is positive," said Joseph P. Walsh, acting director of the D.C. Department of Employment Services. Still, Walsh said he expects the unemployment rate will decrease and increase again this year. "Unemployment is a lagging indicator," he added.

Even with the dip, the District's unemployment rate is still well above the 8.5 percent national rate in March. Natwar M. Gandhi, the city's chief financial officer, projected late last year that the city's unemployment rate would not reach 9.8 percent until 2010.

Maryland's Department of Labor, Licensing and Regulation listed numerous companies that cut jobs in March: Trinity Manufacturing in Baltimore eliminated 111 jobs; U.S. Foodservice in Columbia cut 146 positions; and Barton-Cotton in Columbia cut 200.

But Andy Moser, assistant secretary in the state's labor department, said he is seeing a small reduction in layoffs. Employers "are anticipating a recovery around the corner," Moser said. "They won't let these folks go if they don't have to."

Among the major employers making large job cuts last month in Virginia were American Woodmark in Berryville, which dismissed 249; Sprint Nextel in Reston, which terminated 400; and Richmond-based Circuit City, which let go 1,903 when it went out of business.

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