By V. Dion Haynes
Washington Post Staff Writer
Sunday, November 21, 2010; 7:31 PM
Unemployment rates in Maryland and Virginia rose in August, according to federal government data released Tuesday, signaling a setback for the Washington area's economic recovery and highlighting the fragile state of the U.S. labor market.
In Maryland, the jobless rate jumped to 7.3 percent after holding for two straight months at 7.1 percent, according to the U.S. Bureau of Labor Statistics. The state lost a net of 5,700 jobs in August, officials said, even though the number of positions that were added was three times the national average.
Virginia's unemployment rate rose to 7.0 percent, from 6.9 percent in July, reflecting a net loss of 2,700 jobs. The District's jobless rate remained at 9.9 percent even as the city lost thousands of positions from such steady job creators as professional and business services employers.
The jurisdictions' job losses pale in comparison with the tens of thousands of cuts during the peak months of the recession, and the jobless rates in Maryland and Virginia are well below the 9.6 percent national average. Still, the apparent shift in momentum was a discouraging sign for some economists and experts who earlier this year had pointed to falling unemployment rates as evidence that recovery was taking hold.
"That is not the direction we want to be going," said Sara Kline, associate economist at Moody's Analytics. "Overall, I'd say it's not a good report. The contraction is concerning, something to keep an eye on."
The local jobs picture parallels trends in the national unemployment rate, which rose a tenth of a percentage point in August. Similarly, the nation is experiencing a sluggish recovery: Private-sector jobs are being created, but not quickly enough to put a significant number of unemployed people back to work.
Even though the District's unemployment rate didn't rise, the city's data still reflect a troubling trend. The number of employed residents dropped by 2,900, while the number of the unemployed fell by only 200. Labor experts said this suggests that many long-term unemployed people became discouraged, stopped looking for work and were no longer counted in the data - a reversal of a scenario that played out earlier in the year.
In Maryland and Virginia, the rising unemployment levels were not caused by long-term "discouraged" job seekers who were again counted when they resumed their job search, as has been the case at times in the past year. In both states, employment declined while unemployment increased.
The data in all three area jurisdictions reflect the dismissal of temporary workers involved in the federal census and, in the case of the District, the end of the city's summer youth jobs program. But experts say the numbers also reflect decreases in private sector jobs and a possible retrenchment among some employers about increasing their payrolls.
Maryland lost 3,000 jobs in retail, 2,200 in professional and business services, 1,700 in education and health services and 1,700 in government. It gained 2,000 jobs in construction and 1,000 in financial activities.
Virginia lost 6,000 jobs in government, 1,300 in professional and business services and 1,300 in leisure and hospitality. It gained 1,400 in education and health services, and 1,100 in construction.
The District lost 2,000 jobs in professional and business services in August, 1,500 in education and health services and 800 in leisure and hospitality. It gained 400 jobs in construction and 100 in financial activities.
"There's concern about the recovery - it is moving forward but at a much slower pace," said Ann D. Lang, senior economist at the Virginia Employment Commission. "The housing market and labor market are so slow in returning - that worries employers and consumers."
Nationwide, the state with the highest unemployment rate was Nevada, at 14.4 percent, while North Dakota had the lowest rate, at 3.7 percent. North Carolina gained the most jobs in August, adding 18,600. Michigan lost the most, shedding 50,300.