Washington, DC – Faring Better than Most with Lowest Unemployment Rate
Washington, D.C. lost 63,300 jobs year over year as per the April results from the Bureau of Labor Statistics, a decline of 7.9%. This rate of decline ranked 6th of 82 metros and was better than neighbors Suburban Virginia (-8.4%) and Suburban Maryland (-10.8%); and far better than South Atlantic peers Charlotte (-13.2%) and Raleigh-Durham (-12.9%), as well as Northeast peers New York City (-19.2%), Philadelphia (-15.4%) and Baltimore (-13.4%). Note that these numbers are preliminary and subject to change in the next two months. Moreover, Washington’s unemployment rate climbed to 11.1% in April which ranked 13th best of all 82 metros.
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This was not a surprise given the capital’s high concentration of government employees that employ 30% of the total workforce, or nearly twice the national average of 16.6%. This government base is more stable and more immune to layoffs than the private sector. Washington’s government sector added 2,100 jobs year over year, an increase of 0.9%.
Of Washington’s losses, 76.5% or 48,400 jobs were in the leisure and hospitality sector. This equates to a rate of decline of 57.8%. The retail sector shed another 3,700 jobs, a decline of 16.3%. Washington has the lowest retail employment per (1,000) capita, 33, in the U.S., well below the average of 48. Netting out these two concentrated sectors puts the remaining year-over-year rate of job decline at 1.6% which was the lowest decline of all 82 metros.
Washington’s office sector shed 400 jobs year over year, which was a rate of decline of 0.2%. This ranked 3rd best of 82 metros and well below the metro average office year-over-year decline of 6.6%. The national rate of decline was 6.8%.
To put these jobs in perspective, Washington’s seasonally adjusted job gain over the last expansion was 108,900 jobs, a growth rate of 15.6%. The recent seasonally adjusted loss of jobs accounted for 64% of the gains in the recent expansion. This ratio ranked 27th of 82 metros which was not as strong as the other metrics listed above because of the low growth rate over the last few years. For the national average the recent loss represents a decline of 94% of the net gain during the expansion, while the metro average decline was 83% of the net expansion gain.
Washington may have suffered fewer job losses than most metros because it has a larger government base and lower leisure, hospitality and retail jobs. Its health and education sector lost 11,100 jobs or 8.3%, but many of these may be temporary. While coronavirus cases in the metro seemed to have risen during May, they have flattened or declined slightly through early June. This could stall the reopening of its economy if it does not fall more noticeably. Although some leisure, hospitality and retail jobs will return when the full shutdown ends, other sectors will see layoffs if/when their payroll protection program loans run out. Thus, the outlook remains uncertain until the coronavirus is contained and/or the PPP is renewed.
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