The jobless rate in the Washington area fell from 5.1 percent to 4.9 percent in January, the Labor Department reported on Friday, as the region posted significant job losses in the sectors that form the backbone of the local economy: government and government contracting.
The professional services sector, which includes government contractors, shed 11,200 positions between January 2013 and January 2014, while the government sector lost 8,700 jobs. Economists say those weak numbers are likely tied to the across-the-board federal budget cuts known as sequestration.
Ginger Groeber, founder and chief executive of the contracting job search site Exfederal.com, said federal spending cuts made for a particularly challenging climate last year for both employers and workers in the contracting sector.
“[Agencies] have contractors on a contract, and then all of a sudden, they say, ‘We don’t need these people after next week, they’re done,’” Groeber said. “And then businesses are faced with trying to place these people, almost in emergency mode.”
The region added 20,900 jobs overall in the one-year period ending in January, a modest gain that is not markedly different from the growth seen in jobs reports from the end of 2013.
“We are still limping along and waiting for the thaw,” said Stephen Fuller, director of the Center for Regional Analysis at George Mason University. “The first quarter is going to be not a good quarter. It’s going to underperform what has been projected.”
The largest job gains were in the leisure and hospitality sector, which added 13,100 positions. The education and health services industry also saw relatively strong job growth, with 9,700 positions added. The retail industry added 6,100 positions.
The construction industry added 3,100 jobs. Fuller predicts that this sector will be an important source of job growth for the region in 2014. He forecasts that the construction industry will added 12,000 to 15,000 jobs this year, boosted by what he expects will be an uptick in single-family homebuilding.
Economists said that unusually cold and snowy weather in January might have weighed on job growth, as the conditions could have temporarily put some job seekers and hiring managers on the sidelines.
The Labor Department releases seasonally adjusted jobless rates for metropolitan areas, which allows for that data to be compared on a month-to-month basis. However, the department does not seasonally adjust the numbers of job gains and losses, so those figures can only be compared year-over-year.
The unemployment rate in the Washington region remains well below the national rate, which fell to 6.6 percent in January, only to tick up slightly to 6.7 percent in February.
Jobless rates fell in 367 of the 372 metropolitan areas that the Labor Department tracks. Rates rose in three areas and held steady in two. The highest unemployment rate, 26.1 percent, was in Yuma, Ariz. The lowest unemployment rate, 2.9 percent, was in Midland, Tex.