| WASHINGTON, June 21
WASHINGTON, June 21 Automatic federal spending
cuts known as sequestration have not spawned unemployment in
Virginia, Maryland and Washington, D.C., as many predicted, with
data released on Friday showing that the three places gained
jobs as their unemployment rates dropped over the last year.
According to the Labor Department, Virginia's unemployment
rate was 5.3 percent in May, compared to 5.9 in May 2012. The
drop was also seen for the District of Columbia, where the rate
was 8.5 percent in May, compared to 9.1 percent the year before.
For Maryland, the rate was 6.7 percent, down slightly down from
6.8 percent in May 2012.
Moreover, all three places gained jobs from May 2012.
Because it relies heavily on the federal government for jobs
and money, the region had feared its economy would grind to a
halt after sequestration began on March 1. A widely cited study
from the George Mason University Center for Regional Analysis in
Virginia estimated the state would lose about 154,000 jobs,
Maryland more than 84,000 jobs, and the District around 92,500.
"These economies are showing, I would say, unexpected
strength," the author of the study, Stephen Fuller, told
Reuters. "Everybody was predisposed to thinking that decreases
in federal spending and the sequester effects would have a
visible impact on the economy. And it hasn't shown up. It's
From May 2012, Washington, D.C. gained 3,000 jobs, Maryland
35,600 jobs and Virginia 48,200, the federal data showed.
According to the Virginia Employment Commission, the state saw
the strongest year-over-year increase in payrolls since April
"It shows there's a lot more to this economy. At the state
level too, the economy is more complex than we tend to think
about," Fuller said, adding the federal government had driven
job growth since the 1990s but now other sectors are
More than half the 4,600 jobs Maryland gained since April
were in the private sector, 2,800 said the state's Labor
Secretary Leonard Howie. That was the highest private sector
growth in five years, he added.
But, Fuller warned, the regional economy would have likely
been stronger without sequestration.
Federal and contractor jobs have typically been the largest
portions of the capital area's labor market, and they have also
paid higher salaries on average. The job sectors that are
growing, such as teaching or construction, may have lower
incomes. Meanwhile, federal furloughs and salary cuts could slow
down consumer spending in the area.
The jobless rates in the states bordering the seat of
federal power did not improve from April, as well. The
unemployment rate rose slightly in Maryland from 6.5 percent and
in Virginia from 5.3 percent. In the nation's capital, it
remained the same as the previous month.
CALIFORNIA JOBLESS RATE KEEPS DROPPING
The Labor Department reported that the jobless rates in 25
states dropped in May from April, rose in 17 and were unchanged
in eight. From May 2012, rates dropped in 41 states total,
alongside D.C., rose in four and were unchanged in five.
Nevada once again held the highest unemployment rate in the
nation, 9.5 percent.
Since the end of the 2007-09 recession, California has
frequently held the second-highest spot. But in May, the Golden
State's rate plummeted to 8.6 percent from 9 percent in April
and 10.7 percent a year before, as the state recovery ramps up.
Illinois and Mississippi now hold the second highest
unemployment rates in the country, both at 9.1 percent.
May's rate in Illinois was lower than April's 9.3 percent,
but still above 8.9 percent in May 2012. The state added 11,800
private sector jobs in May from April and 54,000 since May 2012,
according to its employment department.
This year "illustrates the volatile nature of the
unemployment rate," said the department's director, Jay Rowell,
who noted in a statement that the rate rose in January and
February, was flat in March, and then dropped in April and May.
"This trend likely will continue as national and global
events push consumer confidence," he said.
North Dakota again had the lowest unemployment rate in the
country, 3.2 percent.
According to the Labor Department, payrolls grew in 33
states and D.C. altogether, and decreased in 17 states from
April. Ohio gained the most jobs, 32,100, and Pennsylvania lost
the most 9,200. From May 2012, 48 states and D.C. added jobs,
while Alaska and Wyoming lost them.