Jobless rate dips in many Va. areas

Nine of Virginia's 10 metropolitan areas -- including Richmond -- experienced smaller unemployment lines in April from March, according to a report released yesterday by the Virginia Employment Commission.

Despite that drop, the rate is expected to increase this year statewide and nationally -- but not at the fast pace that it has in the past several months.

The unemployment rate in the Richmond area was 7.6 percent in April. That's down from 7.8 percent in March but still more than twice the 3.3 percent rate a year ago in April.

Virginia's unemployment rate was 6.6 percent in April, down from 6.9 percent in March but up from 3.2 percent in April 2008, according to the report. The U.S rate was 8.6 percent in April, down from 9 percent in March but up from 4.8 percent a year ago.

The numbers were not adjusted for seasonal fluctuations. The seasonally adjusted April rate in Virginia remained at the March level of 6.8 percent.

William E. Mezger, the employment commission's chief economist, said seasonal factors are the reason for the monthly fall in the unadjusted unemployment rate, attributing the improvement to hires in leisure and hospitality during the Easter holiday.

"The rate usually does fall in April," he said.

"We had a little bit of hiring activity in professional and business services in April, mostly in Northern Virginia," Mezger said. Most of the 1,800 added jobs in that sector were for accountants and computer programmers.

The April rate did not reflect any increases in construction, which is typical for this time of year. "We didn't get any pickup in construction," Mezger said. "That actually went down, and that is most unusual at this time of year."

He said the lower monthly rate is not a sign that unemployment could be subsiding. Rather, he said he expects jobless claims to rise in May and June as college and high school students look for work in a tight labor market.

Also, with General Motors and Chrysler suspending manufacturing operations, more layoffs are expected from automobile suppliers, Mezger said.

In the Richmond area, some Circuit City Stores Inc. and Qimonda employees were still on the payroll in March.

"They were gone by April," Mezger said.

Operations were shut down at both bankrupt companies. Circuit City, a consumer electronics retailer, was liquidated, closing its last stores in March.

Those job losses here were offset by an uptick in tourism activity, Mezger said.

Danville, with the highest unemployment rate in the state, was the only metro area with an increase in jobless claims, rising to 12.4 percent in April from 12.1 percent in March.

Mezger said the rise there was because of curtailed manufacturing, with unpaid work days taken during the Easter holiday.

"When we are in a recession, unemployment will continue to go up," said Christine Chmura of Chmura Economics & Analytics in Richmond. "Even after a recession ends, the unemployment rate will rise for a couple of months until firms see an increase in demand that is sustained."

She said she expects the recession to end in the first quarter of next year, although some economists are predicting the economy will grow again in the fourth quarter of this year.

Although the unemployment rate will move upward in Virginia and the U.S. this year, it will not move as fast as it has been, Chmura said. "But it will continue to inch higher."

Contact Carol Hazard at (804) 775-8023 or .