The Washington-area labor market has looked gloomy over the past several months, with scant job growth overall and relatively steep job losses in the industries that are the backbone of the local economy.
But the most recent data from the Labor Department show significantly stronger job growth here in the one-year period ending in June, an encouraging sign for a regional economy whose recovery has been only crawling forward.
The Washington metropolitan area added 26,800 jobs, a sharp improvement over the 5,500 job gains registered in the one-year period ended in May. The unemployment rate held steady at 5 percent.
Perhaps the most critical change was in the professional services sector, where 1,700 positions were added. While that is a meager increase for an industry that employs more than 700,000 local workers, it marks a turnaround for a category that had seen job losses in each monthly report since June 2013.
The leisure and hospitality industry continued to lead the region’s job growth, with 9,300 positions added. The retail industry, meanwhile, gained 7,000 positions. But there is a soft underbelly to job growth in these categories: The positions are typically low-paying ones, meaning they don’t contribute as much to overall economic output as knowledge-economy jobs.
“Though the pace of job growth has improved in the Washington metropolitan area recently, it’s not clear that the quality of job creation has improved significantly,” said Anirban Basu, chief executive of Sage Policy Group, a Baltimore economic consultancy.
Basu notes that the report showed weakness in relatively high-paying sectors: On top of only modest gains in professional services, the manufacturing sector lost 2,700 positions, and the information sector shed 2,500 positions. The federal government sector lost 9,300 positions, continuing a streak of job losses amid federal belt-tightening.
Since the depths of the recession, the Washington region’s job picture has held up favorably compared to the national one. However, in recent months, as the nation’s unemployment rate has fallen to 6.1 percent and job creation has strengthened, the local economy is less of a standout.
The Labor Department is scheduled to release its report Friday on the national employment situation in July. Analysts expect that it will show the nation added 235,000 positions and the unemployment rate dropped to 6 percent.
Capital Business is The Post’s publication covering the region’s business community. For a daily rundown of Washington-area business news, sign up for the CapBiz A.M. e-mail newsletter at wapo.st/capbiz.
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