Virginia Employers Shed Jobs in December, Yet the Unemployment Rate Declined
According to the latest data from the Bureau of Labor Statistics, Virginia employers shed 5,000 jobs in December, after adjusting for seasonal factors. With downward revisions to the November job gain, the fourth quarter brought the lowest monthly average gain for the year, with just 1,500 jobs added per month. In fact, the pace of job gain slowed for each quarter of 2012. The private sector accounted for most of the lost jobs (4,600), while the government sector accounted for a smaller loss (400). Despite the loss in December, the state generated a net gain in 2012 of 31,300 jobs for a 0.8 percent increase, which is considerably lower than the national growth rate of 1.4 percent over the same period. In a separate survey of households, the unemployment rate in Virginia dropped to 5.5 percent, the third consecutive monthly decline.
Many industry sectors lost jobs in December. The largest losses occurred in trade, transportation and utilities (6,200 jobs) followed by professional and business services (4,600) and the construction sector (3,000). Smaller declines occurred in information, other services, and government. Partially offsetting some of these losses, the leisure and hospitality sector added 5,200 jobs in December, while education and health services added 3,500 jobs.
Moreover, the education and health services sector accounted for two-thirds of the net new jobs in Virginia during the past 12 months, with a gain of 21,600 jobs. The financial activities sector registered the greatest percentage increase of any major industry sector, with growth of 4.8 percent.
Virginia Beach outpaced other metropolitan areas in the state with the greatest gain in jobs for December, followed at a distance by Lynchburg. However, Blacksburg posted the greatest percentage increase for the month (1.3 percent) and over the year (4.8 percent). Northern Virginia lost the greatest number of jobs in December (5,600), following nine consecutive months of job gain, while Richmond followed with a loss of 4,300 jobs. Over the past 12 months, only three metropolitan areas lost jobs — Richmond, Charlottesville, and Winchester. The non-metro and rural areas of the state lost a small number of jobs in December and were up by just 500 jobs for the year.
Virginia's monthly employment changes were quite volatile in 2012, but smoothing out some of the monthly swings by considering quarterly changes, it is clear that job growth declined as we moved through the year. Perhaps the potential of sequestration weighed more heavily on the labor market in Virginia, in which case we can expect this slow pace of job growth to continue into 2013. Providing a somewhat different signal, the unemployment rate declined to 5.5 percent. This decline came with some growth in the labor force as well as a gain in employment that seems at odds with the employer survey. Taken together, Virginia's labor market indicators suggest an economy that is still growing but at a slower pace than the nation and with considerable uncertainty as we start the new year.
Ann Battle Macheras