The economic recovery from the recession is slowing down nationwide, and the Washington area is poised to absorb more than its share of the pain for the long term, new data say.
A report released Wednesday by the consulting firm Challenger, Gray & Christmas shows more layoffs are in store for the Washington region because of cutbacks in the federal government and defense spending. The cutbacks hit at the heart of two the region’s top industries and come on the heels of May’s unemployment report showing that joblessness is back on the rise here.
Making it worse, said CEO John Challenger, is that unlike in other recessions, analysts are doubtful the feds will quickly ramp up spending again after the freeze and propel the Washington area’s economy forward.
| Recession slowdown hitting region hard | |||||||
| 2011 total | June | May | Apr. | Mar. | Feb. | Jan. | |
| District | 15,771 | 385 | 60 | 1,300 | 8,080 | 5,946 | n/a |
| Maryland | 7,724 | 2,266 | 2,276 | 1,439 | 661 | 862 | 220 |
| Virginia | 6,992 | 1,310 | 841 | n/a | 159 | 2,513 | 2,169 |
| Region total | 30,487 | 3,961 | 3,177 | 2,739 | 8,900 | 9,321 | 2,389 |
| Source: Challenger, Gray & Christmas Inc. | |||||||
“This is a different time — this is driven by deficits,” Challenger said. “The government hasn’t been hit like this before.”
Whereas companies were forced to cut back and lay off employees during the recession, the federal government avoided that by continuing to spend, he said.
But in June, employers in Maryland, Virginia and D.C. said they planned to lay off (or already had) 3,961 employees that month. The total is the second monthly increase in planned layoffs in the region. Since January, the region’s employers have already or plan to lay off 30,487 workers.
According to the George Mason University’s Center for Regional Analysis, most of the region’s job losses in May were because of job cut in the federal government.
“So the question is, are we coming to a head now?” Challenger said. “There is the real question of whether this recession is different in that we’re now coming to terms with our overpayment of the past.”
While Wednesday’s report does not include hiring expectations, nationally and regionally job growth has slowed. That means it will likely take longer to regain the jobs lost during the recession. Nationally, 8.7 million jobs were lost during 2008 and 2009, according to the firm’s report. Nearly two years after the end of the recession, fewer than 2 million jobs have been regained.
After the 1981-82 recession, it took less than a year to recover the 2.7 million jobs lost nationally, according to the firm.
