Oct. 1--The unemployment rate in Hampton Roads and Virginia receded for the second straight month in August as students returned to school and federal stimulus money began to flow to military bases, the Virginia Employment Commission reported Wednesday.

In Hampton Roads, the jobless rate fell to 6.6 percent in August from 7 percent in July as the number of workers without jobs dropped to 55,720 from 59,550 in July. The region's unemployment rate ranks third among the nation's top 49 metro areas, trailing only the Washington metro area, which posted a 6 percent rate, and the Oklahoma City metro area, which posted a 6.1 percent rate.

While August's umemployment figures for Hampton Roads improved, they were still far above the 2008 figures, when the jobless rate was 4.5 percent and 37,910 workers were without jobs.

Statewide, the unemployment rate declined to 6.5 percent in August from 6.9 percent a month earlier, making Virginia's jobless rate the fifth-lowest in the nation, the commission said.

Virginia was one of only four states to show a monthly improvement in jobless figures.

Economists warned that the August improvement in jobless figures is no sure signal that the sluggish economy is heading toward a quick recovery. Nonetheless, economists said, recent data show that Virginia could be creeping out of the recession.

"There are positive signs," said William F. Mezger, the commission's chief economist. "It looks like Virginia is pulling out faster than most of the country."

The number of Hampton Roads workers filing new unemployment claims fell to 5,320 in August, down from 6,334 in July. In August 2008, 3,425 workers filed new claims.

From July to August, Hampton Roads lost 500 jobs, including 300 in the private sector and 200 in the public sector, according to commission data. Over the 12-month period ending in August, the region has lost 8,900 jobs, a 1.1 percent decline.

Job losses are typical for August, as the labor pool shrinks with the tourism industry winding down and students beginning to quit summer jobs to return to school. Over the same period in 2008, for example, Hampton Roads shed 900 jobs.

"It's a good sign," said Vinod Agarwal, an Old Dominion University economist. "The hurt is getting smaller. We're still losing jobs, but the gap doesn't seem to be increasing anymore. National indicators seem to be suggesting that the recession is over."

On Wednesday, the Commerce Department reported that the second-quarter gross domestic product sank 0.7 percent in the spring, better than the 1 percent decline previously estimated. That marks a vast improvement over the GDP's 6.4 percent decline in the first quarter.

More data released this week in the ADP National Employment Report showed that national employment fell by 254,000 in September, following a loss of 277,000 jobs in August. The September figures represent the fewest jobs lost since July 2008.

Still, Larry H. Filer, another ODU economist, cautioned against drawing broad economic conclusions from monthly employment data, especially amid a recession in which a portion of individuals are dropping out of the labor force because they have stopped looking for jobs.

"I suspect we'll see bad employment numbers well into 2010," Filer said. "There are reasonable signals that things are getting better, but (jobless) numbers are still going to stink. We still have a long way to go."

The national picture Data released this week in the ADP National Employment Report showed that employment around the U.S. fell by 254,000 in September, the fewest jobs lost since July 2008.

Unemployment rates for localities

August 2008 July 2009 August 2009 Newport News 4.8 7.5 7.2 Hampton 5.1 7.9 7.5 York County 3.7 5.2 4.8 Poquoson 3.2 5.2 4.8 James City County 3.2 5.1 4.7 Williamsburg 9.3 14.3 13.0 Isle of Wight County 4.1 6.4 6.3

Inside: Virginia will need to borrow to pay unemployment claims, Page 5 of News

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