Region's jobless rate rises as strong sectors show weakness
Thursday, December 3, 2009
Unemployment in the Washington region rose slightly in October, according to government data released Wednesday, as hiring tapered in the professional and business services sector and job losses continued in construction and retail.
The area's unemployment rate for October -- not seasonally adjusted -- was 6.2 percent, the same level the Bureau of Labor Statistics initially posted for metropolitan Washington in September. But on Wednesday, the BLS revised the September figure downward to 6.1 percent.
The federal government, which has protected the region from the full brunt of the recession, continued to be the strongest sector, with a net gain of 12,700 workers from the previous October, compared with an increase of 11,200 from September to September. As a result, the region's unemployment rate falls well below the nationwide not-seasonally-adjusted rate of 9.5 percent for October.
Still, job gains were offset by continued losses in construction and retail, as well as a slowdown in hiring in some typically strong sectors such as professional and business services.
"Although the federal government is hiring, there still is a significant slack in the labor market. There will have to be hiring [in nongovernment sectors] for several quarters to bring the rate down," said Glenn Wingard, an economist at Moody's Economy.com.
The problem is that people who lost their jobs in retail and construction "don't have the skills to obtain federal jobs," Wingard said. "We'll have to see a pickup in consumer spending [for the nongovernmental sectors to improve] and for the labor market to normalize."
Some economists said they were concerned about a change in hiring in professional and business services -- the area's largest sector, which includes lawyers, accountants, federal contractors, architects and temp agencies. The year-to-year net gain in October was 100 jobs, compared with 1,500 in September.
"It's our bread and butter -- it's so much bigger" than the federal government, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. "I've never seen it" add so few jobs, he said.
Hiring has been especially slow at temp agencies.
"Our numbers are down by half from what they were a year ago," said Wendy Zanarotti, associate director of a D.C.-based firm called Help Unlimited Temps, which provides administrative assistants mainly to nonprofit organizations. "They're not getting the projects, so they don't need the extra help."
As a result, the company is launching a concierge service that will offer laundry pickup, grocery shopping and gift-wrapping to individuals and businesses. "We're doing what we can do to stay in business," she said.
From October 2008 to October 2009, according to the government data, the region lost 23,900 jobs. That is an improvement from September, when the year-to-year job loss reached 36,200, and in August, when it peaked at 40,400. Local economists said they think the area's unemployment rate will continue to climb over the next few months, probably peaking slightly below 7 percent in January, when retailers cut their holiday workforce.
Job losses in the hardest-hit sectors slowed in October. The year-to-year loss in retail was 13,200, compared with 14,000 in September. Construction lost a net 14,800 jobs in October over the 12-month period, compared with 15,500 in September.
Even with the area posting a better unemployment rate than other major metropolitan regions, employers here are still cautious. Tim Namie, managing director of Manpower Professional employment services for the Southeast, which includes Washington, said a recent survey showed that employers in the D.C. area trail their counterparts across the nation in their plans to increase their full-time staff but are ahead in their plans to cut staff.
In the survey, Namie said, 10 percent of Washington area employers said they planned to hire more workers in the fourth quarter, compared with 12 percent in the national poll. Moreover, 15 percent in the Washington area said they would reduce payroll, compared with 14 percent nationally.
"It did surprise me," Namie said. "Historically, the D.C. metropolitan area has benefited from federal spending."