Region's jobless rate falls to 5.8 percent

By V. Dion Haynes
Washington Post Staff Writer
Wednesday, December 8, 2010

The unemployment rate in the Washington region dropped to 5.8 percent in October from 6.3 percent a year ago, according to federal government data released Tuesday. Analysts credited the decrease to a rebound in the retail and restaurant segments sparked by a growing willingness among consumers to spend money.

The region also led the nation in the number of jobs added in a 12-month period, according to the Bureau of Labor Statistics.

It was the second straight month in which the unemployment level dropped significantly in the Washington area. In September, the region's not seasonally adjusted jobless rate fell to 5.9 percent, from 6.2 percent the year before, according to BLS data. From October 2009 to this October, the region experienced a net gain of 43,700 jobs, according to Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. In the Dallas and Boston regions, which were tied for second place, a net 23,000 jobs were created, he said.

Fuller attributed the job gains to two factors. The region is seeing an influx of young people taking jobs in the federal government and contracting sector, boosting the economy by spending money in restaurants and retail shops. At the same time, longtime residents are beginning to feel more confident and loosening their grip on their wallets. The demand is prompting restaurants and retail shops to expand their payrolls.

"We've hired more than a dozen people. [Next year] we'll need about 100," said Gus DiMillo, a partner in Passion Food Hospitality, which owns D.C. Coast, TenPenh, Ceiba, Acadiana and PassionFish. The group opened a restaurant in Arlington this year and plans to open two more next year.

"People were downsizing two years ago. Now we're seeing a nice increase in activity," DiMillo said. "Young people have moved into the area, and people who were already here are showing a lot more confidence. I'd call it cautious confidence."

Earlier this year, the region's unemployment rate remained high despite the large number of jobs being created in the federal government and contracting sector - largely because people from outside the region, and not those on the jobless rolls, were filling those positions. But Fuller says that is less the case now.

"Our job mix is very good, and, fortunately, a large part of our job growth is in jobs that unemployed workers were laid off from during the downturn," he said. "We lost a lot of retail jobs. [The new positions] aren't the Christmas holiday jobs - those are part-time - these are full-time regular workers."

The Washington region's 5.8 percent jobless rate is well below the nation's not seasonally adjusted 9 percent level in October. Unemployment in October fell in the majority of the country, in 235 of 372 metropolitan regions.

Last week, the Labor Department said the nation's seasonally adjusted unemployment rate rose in November to 9.8 percent, from 9.6 percent in October. In October 2009, the U.S. unemployment rate was at 10.2 percent.

Several sectors in the Washington region grew at a faster rate from October to October than they did across the country. Leisure and hospitality grew 3.1 percent compared with 1 percent at the national level, according to the BLS. Government grew 2 percent in this region, compared with a 1.1 percent decrease nationally. And retail grew 2.9 percent in the region, compared with 0.5 percent in the nation.

Conversely, manufacturing rose 0.5 percent nationwide and was down 4.1 percent in the region. Information technology was down 2.1 percent nationally and down 3.8 percent in the region.

Still, Peter Muoio, senior principal of Maximus Advisors, a New York-based economic and real estate research firm, said Washington and suburban Maryland rank particularly high in job creation.

"If you look at the past three months, the District led the nation in the percentage job increase, and suburban Maryland was third among 52 largest markets we look at each month," Muoio said, adding that Virginia was ranked 25. "All three of the Washington area subpieces are very clearly doing very well."

The net 43,700 jobs added in the region during the 12-month period ended in October included: 18,000 in business and professional services; 13,000 in the federal government; 9,000 in health and education; 10,000 in retail; and 8,000 in leisure and hospitality. The region lost a net of about 16,000 jobs in sectors including construction (down 5,000), information technology (down 3,000) and financial services (down 2,000).

The region surrounding El Centro, Calif., had the nation's highest October-to-October unemployment rate, at 29.3 percent. Bismarck, N.D., had the lowest, 2.7 percent.

Also on Tuesday, the Labor Department announced that there was a jump in advertised job openings in the United States in October. The Job Openings and Labor Turnover survey showed an increase of 3.4 million advertised jobs at the end of the month, up about 12 percent from September.

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