The Washington area’s job market is expected to rebound fully by the end of the year, putting the region at the forefront of the nation’s economic recovery that in some markets is expected to take more than a decade. The estimates, released Monday in the U.S. Economies report prepared for the U.S. Conference of Mayors, would make the Washington area, which now has a 5.4 percent unemployment rate, the first major mid-Atlantic region to recover from the recession.
More than 76,000 jobs were lost in the Washington area after mid-2008, resulting in a 2.5 percent decline in the employment rate. By this winter, the region will have succeeded in restoring those lost jobs, experts predict.
| Washington bouncing back first | ||||
| Pre-recession | Jobs lost | Percent | Return | |
| Metro area | peak | (thousands) | decline | to peak |
| Washington, D.C. | 2008 Q3 | -76.2 | -2.5% | 2011 Q3 |
| Allentown, Pa. | 2007 Q4 | -14.1 | -4.1% | 2012 Q3 |
| New York | 2008 Q1 | -385.2 | -4.5% | 2013 Q2 |
| Baltimore | 2008 Q1 | -58.4 | -4.4% | 2013 Q3 |
| Philadelphia | 2008 Q1 | -135.4 | -4.8% | 2013 Q3 |
| Dover, Del. | 2008 Q1 | -4.2 | -6.4% | 2013 Q4 |
| Richmond | 2007 Q3 | -36.0 | -5.7% | 2014 Q4 |
| Norfolk | 2007 Q3 | -47.8 | -6.1% | 2015 Q3 |
| Atlantic City, N.J. | 2006 Q3 | -17.7 | -11.5% | Beyond 2021 |
| Source: U.S. Metro Economies Report 2011 | ||||
The next mid-Atlantic metro area after D.C. is supposed to recover a full year later.
The Allentown, Pa., area, which includes part of New Jersey, is projected to regain its lost jobs by the end of 2012. Major areas like New York and Philadelphia are not expected to recoup their losses until mid-2013.
“This recession has been the toughest to recover [from] since the Great Depression,” said Jim Diffley, senior director at research firm IHS Global Insight, which published the report.
D.C.’s recovery is ahead of its neighbors largely because of the ramp-up in federal spending over the past decade, experts said. That stability helped the region avoid the dramatic spikes in unemployment others endured, while stimulus money employed later in the decade accelerated Washington’s recovery.
That also has driven a huge demand for professional services in the region, a big part of why the Washington area’s gross metropolitan product rose by 11 percent from 2007 to 2011 to more than $426 billion, according to the report. Washington ranks fourth nationally behind New York, Los Angeles and Chicago and has a larger economy than the entire country of Norway.
However, the Washington region’s growth could slow — but not stop — if federal spending is cut back enough to create job losses. That happened to the high concentration of defense contractors in Southern California after the 1991 recession and slowed Los Angeles’ recovery, Diffley said.
“No doubt Northern Virginia is exposed in that regard but it’s all about the type of spending that’s cut,” he said.
It could be worse — some areas aren’t projected to recover their lost jobs until after 2021. Most of those cities are in the Rust Belt, Florida or the West, where bursting real estate bubbles or the permanent loss of manufacturing plants devastated economies.
