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Region's Jobless Rates Stabilizing
But Officials Expect Unemployment Will Continue to Rise

By V. Dion Haynes
Washington Post Staff Writer
Sunday, May 24, 2009

Unemployment rates in the District, Maryland and Virginia showed signs of stabilizing in April, according to government data released yesterday.

Maryland's unemployment rate dropped to 6.8 percent from 6.9 percent in March and Virginia's rate remained steady at 6.8 percent, according to the U.S. Bureau of Labor Statistics. The District's rate returned to 9.9 percent, the level it reached in February before dipping to 9.8 percent in March.

Employment officials say it's too soon to determine whether the trends are a harbinger of recovery. The numbers could mean that employers staffed up temporarily for Easter and began summer seasonal hiring.

"It's great news and shows we aren't continuing the [upward] trend," said Andy Moser, assistant secretary of the Maryland Department of Labor, Licensing and Regulation.

"At the same time, it's not time to go out and get super happy, yet," he said. "We'll have to wait to see what happens in the upcoming months."

And the slowing unemployment rate may indicate not that payrolls are growing but that more of the unemployed have stopped looking for work and are not being counted.

There is evidence that the rate may grow. Although the number of mass layoffs, involving 50 or more people, decreased across the nation, it rose in Maryland and Virginia in April. Employment officials said many of those who lost their jobs in mass layoffs in April may not be reflected in the states' unemployment rates until May.

The Bureau of Labor Statistics said there were 12 mass layoffs in Maryland last month, up from eight in March. Last month, 1,115 people lost their jobs in those layoffs, up from 531 in March.

And in Virginia, the number of mass layoffs rose to 42 in April from 14 the previous month. The number of people who lost their jobs jumped to 4,052 from 1,229. The bureau had no numbers for the District.

"One would expect that a region characterized by one of the lowest unemployment rates in the nation [5.9 percent in March, compared with 8.5 percent nationwide that month] would also be characterized by relatively low numbers of announced mass layoffs. But that is not what we observe," said Anirban Basu, chairman and chief executive of Sage Policy Group, a Baltimore economic and policy consulting firm.

"Most economists anticipate that unemployment nationally will only rise by another 1 percent or so before we achieve the peak for the cycle," he said, adding that the region is a "latecomer" to the recession. "It may be that unemployment rates will rise further than that in the Washington region before all is said and done."

The area's mass layoffs were driven largely by declines in the retail and housing sectors.

Atlanta-based Home Depot last month shut down all 34 of its Expo stores, including two in Maryland and one in Virginia. That left nearly 300 people jobless in Bethesda, Columbia and Fairfax.

Bethesda-based Winchester Homes let 59 employees go in production, sales, land acquisition and accounting.

"Volume of sales and production curtailed as a result of challenges in the marketplace. We had to scale our employee level to match the level of our business," said Steve Nardella, Winchester's senior vice president for operations.

The region's job picture is not expected to improve in the near future. Based on mass layoff notices filed with the states and the District, unemployment numbers likely will continue to climb well into the summer.

Showing up in the May unemployment numbers will be Kaiser Permanente, which laid off 61 information technology employees in Silver Spring last week when it decided to contract the services to IBM. Ritz Camera, which has been closing stores in the wake of its Chapter 11 bankruptcy filing earlier this year, laid off 63 from its Beltsville headquarters this month and plans to let another 47 workers go next month, according to the Maryland labor department.

BearingPoint, which is phasing out in a Chapter 11 bankruptcy filing, will lay off 88 people in McLean next month.

"I think the [Virginia unemployment] rate will pick up in May," said William F. Mezger, chief economist for the state's Employment Commission. "In May, we'll start to see layoffs at auto suppliers and you'll see layoffs at Chrysler dealers who were told their franchises will end in June."

District agencies and companies filed notices this year that they intended to lay off 121 people, including 18 at the Department of Parks and Recreation.

"We had an $800 million budget deficit and each agency made adjustments to fall within the reduced budget for the year," said Mafara Hobson, spokeswoman for Mayor Adrian M. Fenty (D).

Natwar M. Gandhi, the chief financial officer for the District, has said he expects the city's unemployment rate to go as high as 11.5 percent next year.

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