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KLMNO WASHINGTON BUSINESS Report suggests a hiring slowdown
Region’s jobless rate rises after months of employment gains
by V. Dion Haynes
The Washington region’s un- employment rate rose to 6.0 per- cent in May from 5.9 percent the previous month, according to federal government data released Wednesday, illustrating for some experts a slowdown in the hiring surge seen earlier this year. While job growth remains
sluggish nationwide, economists have seen hopeful signs this spring of a labor market recovery in the D.C. area. The region’s job- less rate, which peaked at 6.9 per- cent in January and February, has been falling faster than econ- omists had projected. The Dis- trict, Maryland and Virginia have all reported net employment gains, adding private-sector jobs faster than other parts of the country.
But in May, experts said, some local employers began putting the brakes on hiring as global fi- nancial markets tumbled on fears that economic recovery was fal- tering. “The improvements [in hiring]
we saw early in the year perhaps will not be sustained through the end of the year,” said Sara Kline, associate economist at Moody’s Analytics, who studies the Wash- ington region. “We’re seeing a pause in the recovery.” Accelerated hiring in early
JOSHUA ROBERTS/BLOOMBERG NEWS
2010 drew long-term or so-called discouraged unemployed people back into the labor force to re- sume their job search. In the first few months of the year, the growth in jobs was able to absorb many of those people, experts say, and the unemployment rate dropped.
But when hiring slowed, the trend on the unemployment rate reversed. “Don’t interpret [the higher unemployment rate] as more lay- offs,” said James Diffley, senior director of IHS Global Insight’s suburban Philadelphia office. “People are saying, ‘I’m looking for work and don’t have it now.’ ” When they don’t get hired, he said, they “push the unemploy- ment rate up.” Beyond concerns about the broader economy, D.C. area em-
ployers were also more cautious about the federal government’s moves away from contracting out work. “Clearly, expectation was being
created both by the federal gov- ernment and the government contractor community about cur- rent or future [job] opportuni- ties,” said Alan Chvotkin, exec- utive vice president and counsel for the Professional Services Council, a trade association rep- resenting government contrac- tors. “Some may not be as real as anticipated, and there may be a mismatch between expectations and actual jobs available.” Despite the slight uptick in un- employment, the D.C. region con- tinued to outperform most of the nation, according to the govern- ment data, and compared with May 2009, the area’s jobless rate
of 6.0 percent was unchanged. The not-seasonally adjusted
U.S. unemployment rate in May was 9.3 percent. In more than two-thirds of the 372 metropoli- tan regions, unemployment for the month was higher than it was the year before. About one-third of the regions had rates of at least 10 percent.
On a year-to-year basis, the
Washington region experienced net gains in several sectors in May, including retail, which add- ed 8,600 jobs; professional busi- ness services, which added 4,100; and government, which added 13,900.
Still, other sectors continued
sliding, including construction, which lost 6,500 jobs; informa- tion, which lost 5,000; and finan- cial, which lost 3,800.
haynesd@washpost.com
Boeing agrees to acquire Fairfax-based Argon ST Argon develops systems used in
By Stephen Manning Boeing has agreed to acquire
the Fairfax-based combat engi- neering firm Argon ST for about $775 million, reflecting a shift by defense contractors seeking to ac- commodate a Pentagon that wants high-tech intelligence tools as much as big guns and heavy ar- mor. The move comes as the Defense
Department is cutting some big weapons meant for conventional wars out of its budget while it shops for technology better suited to fight shadowy insurgent groups in places such as Iraq and Afghanistan.
surveillance and combat, includ- ing reconnaissance equipment mounted on planes, sensors meant to warn of an approaching enemy and special sights to help troops find snipers. Its primary customers are the Air Force, the Navy and the Department of Homeland Security. The company reported $366 million in revenue in fiscal 2009 and has about 1,000 employees in several states. Roger Krone, head of Boeing’s
network and space division, said the company was interested in Ar- gon because of the changing pri- orities at the Pentagon and be- cause war-fighting technologies are “going to be the really impor-
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Daily Stock Market Performance Index
Dow Jones Industrial Average
11,600 10,900 10,200 9500 8800 8100
Nasdaq Composite Index
2600 2300 2000 1700
S&P 500 Index 1250 1175 1100 1025 950 875
1030.71 –1.0 –7.6 2109.24 –1.2 –7.0 9774.02
Close %Chg –1.0
Daily
%Chg –6.3
YTD
tant markets in the future.” Boe- ing gets roughly half of its rev- enue from government defense, space and security contracts. The deal shows the willingness of big contractors to make acqui- sitions as they try to match the Pentagon’s shifting priorities, analyst Brian Ruttenbur of Mor- gan Keegan wrote. “We believe companies in this space are at- tractive targets for the larger de- fense contractors who all have strong balance sheets but are fac- ing slowing growth opportuni- ties.”
Boeing’s offer of $34.50 per share is a 41 percent premium to Argon’s closing price Tuesday. Ar- gon said its board had approved
the takeover and plans to recom- mend it to shareholders. The deal is expected to close in the third quarter. Once acquired, Argon will be a stand-alone subsidiary of Boeing. Argon chief executive Terry Collins was the firm’s largest shareholder, with a 12.4 percent ownership stake according to a company regulatory filing in Jan- uary. He stands to make $93.7million on his shares if the deal goes through at the proposed price. Argon shares jumped 40 per- cent Wednesday to close at $34.29; Boeing shares fell 29 cents, to $62.75.
—Associated Press THE MARKETS
Industry Group Automobiles
Electrical Equipment
Energy Equipment & Svcs Tobacco
Paper & Forest Products Real Estate Mgmt & Dev Health Care Technology Biotechnology
Office Electronics Building Products
S&P 500 Industry Group Snapshot Daily
%Chg 1.20 0.56 0.47 0.19 0.03
–2.43 –2.69 –2.69 –3.58 –4.44
International Stock Markets Daily
Americas
Brazil (Bovespa) Canada (S&P/TSX Comp.) Mexico (Bolsa) Europe
Eurozone (DJ Stoxx 600) France (CAC 40) Germany (DAX) U.K. (FTSE 100)
Asia Pacific J A S O N D J
Company 3M
Alcoa
AmExp AT&T BoA
Boeing
Caterpillar Chevron
Exxon Mobil GE
Dow Jones 30 Industrials Daily
Close 78.99
10.06 39.70 24.19 14.37 62.75 60.07 67.86
Cisco Systems 21.31 Coca-Cola DuPont
50.12 34.59 57.07 14.42
Home Depot 28.07 HP
43.28
%Chg %Chg 0.6
–2.7 –37.6 –1.0 –1.1 –1.4 –0.5 –1.3 –0.7 –1.4 –0.4 –1.8
YTD –4.5 –2.0
–13.7 –4.6 15.9 5.4
–11.9 –11.0 –12.1 2.7
–0.4 –16.3 –0.4 –2.0
–2.3 –16.0
Other Measures Index
Close
DJ Total Stock Market Index 10,750.01 Russell 2000
609.49
Post-Bloomberg DC Area Index 177.06 CBOE Volatility (VIX)
34.54
–4.7 –3.0
F M A M J
Company IBM
Intel J&J
JPMorgCh Kraft Foods McDonald's Merck
Microsoft P&G Co Pfizer
Travelers Wal-Mart Walt Disney
Close 123.48
19.45 59.06 36.61 28.00 65.87 34.97 23.01 59.98 14.26 49.25
United Tech 64.91 Verizon
28.02 48.07 31.50
Daily
–1.7 –0.3 –1.2 –1.5 –0.9 –1.3
%Chg %Chg –1.3
YTD –5.7
–4.7 –8.3 –12.1 3.0 5.5
–1.3 –24.5 –0.6 –0.1 –1.0 –0.1 –2.1 –1.7 –2.5
–4.3 –1.1
–21.6 –1.2 –6.5
–15.4 –10.1 –2.3
Daily%Chg YTD%Chg –1.0 –1.1 –1.2 1.2
–6.5 –2.5 –5.5 59.3
Australia (ASX 200) China (CSI 300) Hong Kong (Hang Seng) Japan (Nikkei)
4301.50 2563.07
20,128.99 9382.64
Cross Currency Rates EU €
US $
US $ per EU € per
Japan ¥ per Britain £ per Brazil R$ per
Canada $ per Mexico $ per
0.8173 88.4700 108.2400
0.6690 0.8187 0.0076 1.8055 2.2090 0.0204 1.0642
1.3020 0.0120 12.9339 15.8246 0.1460
Interest Rates Consumer Rates
Money market funds 6-Month CDs 1-Year CDs 5-Year CDs New car loan Home-equity loan
0.77 0.81 1.15 2.54 6.32 7.41
–1.0 –1.1
–0.6 –2.0
Japan ¥
1.2235 0.0113 0.0092
Britain £
1.4947 0.5540 1.2216 0.4527
Brazil R$ Canada $ Mexico $ 0.9397 0.0773 0.7680 0.0632
132.2300 48.9325 83.1300 6.8400 0.3707
2.6987 1.5906 0.5896
0.6287 0.0517 1.6962 0.1396 0.0823
19.3320 7.1640 12.1537 Close
60,935.90 11,294.42 31,156.97
243.32
3442.89 5965.52 4916.87
%Chg –1.7 0.3
–1.0
–0.2 0.3 0.2 0.1
YTD%Chg –30%
–5.0% 0 +5.0%
Commodities Futures
Copper Corn
Crude Oil Gold
Natural Gas
$2.9360 $3.5425
Close %Chg +0.7 +9.0
Daily
Orange Juice Silver
$1245.90 $4.62
$75.63 –0.4 +0.3 +1.5
Value of $1000 invested for the past: Daily
0% +30%
Exchange-Traded (Ticker) %Chg Coffee (COFF.L) Copper (COPA.L) Corn (CORN.L) Cotton (COTN.L) Crude Oil (CRUD.L) Gasoline (UGAS.L) Gold (BULL.L)
0.9
–0.5 6.8 –1.1 0.2
–0.2 0.6
Natural Gas (NGAS.L) Silver (SLVR.L)
Gainers Applied Signal Tech
Unifirst
GreatAtla&PacTea Mercury Computer Genoptix Inc
Sonic Solutions AM Castle & Co Plains Exploration
–0.1 0.5
Gainers and Losers from the S&P 1500 Index Daily
Close %Chg $19.65 8.0
$44.02 7.3 $3.90 6.8 $11.73 6.6 $17.20 5.1 $8.35 4.8 $13.89 4.3 $20.61
4.1
EdwardsLifesciences $56.02 4.1 StdMotor Products Diamond Foods Inc Diamond Offshore Atwood Oceanics Electro Scientific Digi International Neenah Paper Inc HSN Inc
$8.07 3.9 $41.10 3.7 $62.19 3.4 $25.52 3.1 $13.36 3.1 $8.27 3.0 $18.30 2.9 $24.00 2.9
WilmingtonTrustCorp $11.09 2.9 PhoenixTechnologies Aqua America
0.53% 0.25% 3.25%
Bank Prime Federal Funds LIBOR 3-Month
3.21% 4.05% 4.62%
10-year note Yield:
30-Year fixed mortgage 15-Year fixed mortgage 1-Year ARM
5-year note Yield:
2.93 1.78
4:30 p.m. New York time.
$2.89 2.8 $17.68 2.8
Losers
Acuity Brands Inc ION Geophysical Enzo Biochem
Brown Shoe Nautilus Inc
Standard Register Fifth Third Bancorp Headwaters Inc NCI Building Sys MarineMax Boyd Gaming
Fairchild Semico Petroquest Energy RF Micro Devices Intl Rectifier Corp
Close %Chg $36.38 –11.2
Daily
$3.48 –7.9 $4.07 –7.1
MonarchCasino&Resrt $10.13 –6.5 Presidential Life Dynegy
$9.10 –6.5 $3.85 –5.9 $15.18 –5.8 $1.52 –5.6 $3.14 –5.4 $12.29 –5.1 $2.84 –5.0 $8.37 –5.0 $6.94 –4.9 $8.49 –4.9 $8.41 –4.9 $6.76 –4.8 $3.91 –4.6 $18.61 –4.6
OverseasShipholding $37.04 –4.6 Celgene
$50.82 –4.5 Treasury Performance Over Past Three Months
2-year note Yield:
6-month bill Yield:
0.60 0.22
Note: Bank prime is from 10 major banks. Federal Funds rate is the market rate, which can vary from the federal target rate. LIBOR is the London Interbank Offered Rate. Consumer rates are from Bankrate. All figures as of
Soybeans Sugar Wheat
$700
Candice Petersen, right, works with a job seeker on her résumé at a job fair in the District in May. The Washington region’s
unemployment rate rose to 6.0 percent in May from 5.9 percent the previous
month, according to federal data released Wednesday.
N.Y. firm wins bid for Georgetown mall
Two local developers lose auction for space that sits half empty
by Jonathan O’Connell Capital Business Staff Writer
The feud over the ownership of the Shops at Georgetown Park has ended, and neither of two prominent local developers, Her- bert S. Miller and Anthony La- nier, came away with the retail center. Angelo, Gordon & Co., a New
York private equity fund, won control of the landmark M Street property when it received ap- proval from a federal bankruptcy court Tuesday to purchase a loan on the mall for $61 million. The seller, Capmark Financial
Group, was Miller’s financial backer in purchasing the mall for $84 million in 2006, but the firm filed for bankruptcy protection last year and Miller’s Western De- velopment defaulted on the loan in March 2010. Miller’s financial troubles stemmed in part from his inabili- ty to lease space in the mall, which currently sits half empty. The developer attributed the lack of interest to his legal dispute with Lanier, president of East- Banc, who claimed that Miller il- legally excluded him from a deal to purchase the property. When the loans on the mall went to auction on June 25, East- Banc teamed with Chevy Chase- based JBG Cos. to put up $60.25 million to purchase the loans. Vornado/Charles E. Smith, based in Arlington, bid $60.75 million.
EastBanc and JBG Cos. filed protests claiming Angelo Gor- don’s bid was based on credit and reimbursements that should not be counted as cash. Angelo Gor-
don and EastBanc declined to comment on Wednesday. Miller, chairman of Western
Development, said he will be re- tained by Angelo Gordon as a de- veloper on a fee basis, allowing him to drive improvements the enclosed brick mall that he first built in 1981 before selling it. He said he did not understand La- nier’s persistence in creating le- gal blockades. “We’ve offered them to be our
partner many times, and they’ve never accepted,” Miller said. “It’s just smoke – that’s all they’ve got.” Miller said he is still waiting for the D.C. Superior Court to re-
EastBanc and JBG Cos. filed protests against Angelo, Gordon & Co.’s bid.
solve lawsuits between Western and EastBanc but that he is hop- ing to begin leasing space and planning the property’s redevel- opment in earnest, even though it will not be as the property’s own- er.
“It’s just a question of time now
— hopefully,” he said. D.C. Council member Jack Ev-
ans (D-Ward 2), a close friend to both men, said Wednesday he tried to get the two to reconcile, but the dispute had become larg- er than the 315,000-square-foot property. “Everyone in the neighborhood
that I’ve spoken to at least wishes it would be resolved,” Evans said. “To have two very upstanding cit- izens of Georgetown in such a tussle has really been unfortu- nate.”
oconnellj@washpost.com
Michelle Singletary is away. The Color of Money column will return. THE COLOR OF MONEY
On Mondays, The Washington Post offers Capital Business, a weekly publication covering the region’s business community. A one-year subscription costs $49 and is available only to Post subscribers.
Visit
washingtonpost.com/capitalbusiness for more details. Data and graphics by
THURSDAY, JULY 1, 2010
$1.4825 $18.67
$9.4850 $0.1803 $4.6475
day $1000
Close %Chg +3.3 +0.4 +0.1 +2.6 +5.1
Daily
month $1300
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