Unemployment rate slipped in Md. and Va. in January, held steady in D.C.

By V. Dion Haynes
Washington Post Staff Writer
Sunday, March 13, 2011; 7:04 PM

The unemployment rates fell slightly in Maryland and Virginia in January but remained steady in the District, according to Labor Department data released Thursday. The data show strong job growth in the District and Virginia but losses in Maryland.

Maryland's jobless rate decreased from 7.4 in December to 7.2 percent, while Virginia's dropped to 6.5 percent from 6.6 percent. The District's rate remained at 9.6 percent in January.

The U.S. unemployment rate in January fell to 9 percent from 9.4 percent. The federal government's release of state unemployment data significantly lags its reporting on the nation's jobless levels. The January U.S. jobs report was issued in early February, and the government has since released a new set of numbers showing that the U.S. unemployment rate dropped to 8.9 percent in February.

The District, Maryland and Virginia were early indicators of the tentative economic recovery taking hold across the country, showing steady drops in the unemployment rates before that trend emerged in the national data. Some experts now say they see more of a mixed picture in the Washington region.

Sara Kline, an associate economist at Moody's Analytics, said the data showed strong job gains in Virginia and Washington. But she said she was concerned about a loss of 7,100 payroll jobs in Maryland.

"On the surface, you might say it's a good thing" that Maryland's unemployment rate dropped after remaining steady for four consecutive months, Kline said. "I'd say no, it's concerning. People are stepping out of the labor force; they've stopped looking for jobs."

In a conference call Thursday, Alexander M. Sanchez, Maryland's secretary of labor, licensing and regulation, noted that the state had had seven consecutive months of job growth. He said Maryland's 7.2 percent unemployment rate is at its lowest level since May 2009.

Still, other experts agreed with Kline that the decrease in the rate was not attributable to job gains but to the long-term unemployed halting their search for work. The Labor Department counts only jobless people who are looking for work in its unemployment data.

An exit of discouraged jobless people from the data can lower a state's official unemployment rate, but economists consider it a signal that conditions for hiring have worsened.

The Labor Department data show that Maryland experienced net job gains in retail (up 700) and professional and business services (up 500).

But it recorded net losses in several other sectors: education and health, down 2,500; construction, down 2,300; government, down 1,500; and leisure and hospitality, down 1,100.

Maryland officials say steep losses in the education services sector contributed to the overall job decline. The sector lost 4,500 jobs in January, compared with a loss of 600 in December. Officials said they will closely watch data from coming months to see whether the figure is accurate.

"We looked at monthly job changes [in the education services sector] all the way back to February 1990, and this was the largest monthly decline," said Tim Bibo, a research analyst in the department. "We'll continue to look at it and see what happens when the revised numbers are released."

In Virginia and the District, the opposite trend is playing out. Data suggest that long-term unemployed people are again searching for jobs - and some are finding them.

Virginia's labor force grew by 2,400. The number of employed people increased by 16,900, and its jobless rolls dropped by 5,564.

The state recorded net job losses in leisure and hospitality (down 2,000) and financial activities (down 700). But several other sectors had net gains: education and health, up 5,300; retail, up 4,900; professional and business services, up 4,900; and construction, up 3,700.

"We're seeing that there is some job creation going on," said Ann D. Lang, senior economist at the Virginia Employment Commission. Employers "feel a little bit better about bringing someone on and keeping them on."

Despite its unchanged unemployment rate, the District had a gain of 2,000 jobs in January.

Sectors that experienced a net loss of jobs included professional and business services, down 700; financial activities, down 400; and retail, down 100. Gainers included education and health, up 900; government, up 800; leisure and hospitality, up 800; and construction, up 200.

"Job growth is enough to absorb the new job seekers, even if it's not pushing down the unemployment rate," Kline said.

The state with the highest unemployment rate was Nevada, at 14.2 percent. The state with the lowest rate was North Dakota, at 3.8 percent.

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