Virginia's economy turned in another mixed performance in June as unemployment remained low but job growth slumped for the second straight month.
The state's unemployment rate dipped to 2.8 percent in June, from 3 percent in May. Virginia's jobless rate has been at or below 3 percent for 15 of the past 16 months.
Unemployment also declined in Maryland, to 3.6 percent in June from 3.8 percent in May, and fell to a seasonally adjusted 6.1 percent in the District from 6.5 percent in May. The District's jobless rate has been moving steadily downward since February 1998.
Virginia's slower job growth does not pose a threat at this point to the state's budget projections or to a promise by Gov. James S. Gilmore III to complete a phaseout of the state's automobile tax, said University of Virginia economist John L. Knapp. Virginia and other states continue to benefit from taxes on investors' stock market profits and from rising wages, he said.
"State revenues have been growing very well. I think we're okay," Knapp said.
But the combination of a shipyard strike in Newport News and setbacks in the state's textile, apparel and chemical industries has held job growth to 1.8 percent from June 1998 to June 1999, said William F. Mezger, chief economist of the Virginia Employment Commission. In the 12 months ending in June, the state added 59,800 jobs--far below the 90,000 annualized job gain over the first three months of this year. In May, the year-to-year job growth totaled 62,800, a 1.9 percent increase.
Still, Virginia officials aren't too concerned about June unemployment figures. "The fact that Virginia had the best June unemployment level in over four decades amplifies the strength of the state's economy," Gilmore said.
Virginia also is riding the strength of Northern Virginia's technology-led economy, Mezger said. Virginia's Washington area suburbs added 42,300 jobs between June 1998 and June 1999, a growth rate of 4 percent--a little slower than earlier in 1999, but far ahead of the other major job centers in the state.
"There is a slight cooling in job growth, but we're still ahead of where we thought we'd be," said state Secretary of Finance Ronald L. Tillett. Revenue for the fiscal year that ended in June will be more than 10 percent above fiscal 1998 revenue, creating a slight surplus for the year, Tillett said.
Job growth in Maryland slipped to 2 percent in June, year over year, compared with an average of 2.4 percent during the first five months of the year.
Employment in the Washington metro area reached 2.63 million in June, up 2.5 percent from June 1998.
District employment, counting commuters, totaled 618,200 in June, the highest monthly level so far in 1999, but only 700 jobs ahead of the June 1998 figure.