Labor market conditions improved in the District of Columbia in October according to the latest labor market report. Payroll employment increased by 1,500 jobs due to moderate increases across most industry sectors. The household survey indicated continued improvement as the unemployment rate declined for a seventh consecutive month and for the 13th time in the past 14 months. At 8.5 percent, the unemployment rate was 2.0 percentage points lower than its recent peak of 10.5 percent in August 2011.

Looking at the payroll numbers more closely, the October increase in private payroll employment was the result of increases across most industry sectors. The only sector to register a decline for the month was leisure and hospitality, where employment at accommodation and food services establishments declined by 1,300 jobs. There were moderate increases in professional and business services (900), construction (600), and other services (600) while gains in other sectors were more modest. Total government employment edged higher by 200 jobs. Although employment increased in nine out of the last 12 months, the year-over-year change in total payroll employment in October was just 0.6 percent — nine-tenths lower than the national rate of 1.5 percent. Year-over-year growth in private sector employment was stronger at 1.3 percent, but still well below the 3.2 percent rate in January of this year and 3.7 percent rate in September 2011. Leading the increase in private employment over the past year was health care services, other services, construction, and education jobs. The gains in these sectors offset declines in professional and business services, information, and financial services. Professional and business services is typically a strong sector for the District of Columbia's labor market, so the decline over the past 12 months could very well reflect uncertainty regarding pending changes in fiscal policy.

The results of the household survey indicated continued improvement in the labor market in October. The unemployment rate fell two-tenths to 8.5 percent. The number of unemployed declined for the 14th consecutive month. The number of employed in the survey jumped by 3,200 workers. This followed an increase of 3,500 in September, which was the second largest increase in the history of the series. As a result of another unusually large increase in the number of employed, the labor force increased sharply, again, and the labor force participation rate rose by four-tenths to 68.5 percent.

Overall, the surveys painted a positive picture of the labor market for October. The unemployment rate continued to decline and private payroll employment rose moderately. However, at 8.5 percent the unemployment rate remained elevated, indicating a very weak labor market for District of Columbia residents. In addition, private payroll employment gains for most of 2012 were modest, in contrast to stronger increases last year. Perhaps concerns about anticipated cutbacks in federal spending have impacted hiring decisions within the area. So, despite improvement over the past 12 months, labor market conditions remained weak and the outlook for the near term still uncertain.