Region's jobless rate holds steady, but raises concern

Hampton Roads' unemployment rate was unchanged at 7.3 percent in September amid a continued loss of jobs in the region, the Virginia Employment Commission reported Wednesday.

The jobless rate remained stable because the size of Hampton Roads' civilian workforce shrank between August and September. The September rate was up from 7.1 percent a year earlier, according to VEC figures, which were not seasonally adjusted.

However, the number of people employed on regional payrolls fell 6,000 in September and was down 4,800 from one year earlier. Such payroll employment excludes the self-employed, domestic workers, unpaid family members and volunteers.

"I didn't expect to see this," said Greg Grootendorst, chief economist at the Hampton Roads Planning District Commission. "We're going in the wrong direction."

Compared with many of the nation's metro areas, Hampton Roads continues to do well, Grootendorst said. Still, the region has lost 53,400 jobs from its peak in July 2007, he said.

"With that much employment gone, it puts in perspective how hard this region has been hit," he said.

Cutbacks in defense spending have shown up in the declining number of Hampton Roads workers in the professional and technical service sector, which fell by 300 positions in September and was down 2,300 from one year earlier. That has eroded business confidence, Grootendorst said.

"A lot of contractors here are holding back and wondering if the next contract will be coming through," he said.

Defense contracting jobs "are fairly high-paying jobs and have a bigger ripple impact on personal spending," said Christine Chmura, president of Chmura Economics & Analytics, a Richmond-based forecasting firm.

When adjusted for seasonal factors, Hampton Roads' jobless rate for September jumped to 7.7 percent from 7.3 percent in August instead of remaining flat, she said.

The job losses may prove less severe after the VEC does its annual review of the data in March, Chmura suggested. Her firm's calculations for the region in September showed zero job growth rather than a loss of jobs.

The biggest contraction in the region's payroll employment in September occurred in the leisure and hospitality sector, which lost 8,300 jobs. The sector had 3,300 more jobs than a year earlier, according to VEC data.

In retail, employment fell 400 and was down 2,800 from September 2010. Meanwhile, financial jobs declined by 200 for the month and 1,300 from one year earlier.

Virginia's jobless rate for September slipped to 6.4 percent from 6.5 percent in August but remained well above the state's 10-year annual average of 4.3 percent. Nationwide, the rate dropped to 8.8 percent from 9.1 percent in August.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com