Virginia's unemployment creeps up to 2.9 percent

Virginia's unemployment rate inched up in October to 2.9 percent, a 0.1 percentage-point increase over September, fueled in part by layoffs in the mortgage banking industry, state officials said Wednesday.

Hampton Roads' jobless rate climbed to 3.1 percent from 3.0 percent in September. It was 3.2 percent in October 2006.

The real estate sector in Hampton Roads experienced the worst decline of any job category, shedding 800 positions last month -- a drop of 4.6 percent -- according to the report by the Virginia Employment Commission. Those job losses are part of continued fallout from a nationwide housing decline and the subprime lending crunch.

William Mezger, the commission's chief economist, said many of those losses stemmed from rollbacks in seasonal employment related to short-term rental properties and maintenance -- jobs more prevalent during summer months.

Still, he said, those numbers likely include losses in residential home building, real estate sales and the mortgage industry.

At Virginia Beach-based Resource Bank, for example, employment has dropped from 325 to 150 employees after significant financial losses stemming from defaults on subprime mortgages.

The state also lost 8,900 leisure and hospitality industry jobs last month, as resorts, theme parks and other recreational sites scaled back fall operating levels.

Virginia's seasonally adjusted unemployment rate still bests the national rate of 4.4 percent, which fell slightly from 4.5 percent in September.

Despite the job losses, the state's nonfarm employment of 3.81 million last month was the second-highest on record. One reason the unemployment rate declined is that the state's labor pool rose by 7,700 workers in October, the report said.

Unemployment rates among metropolitan areas ranged from 5.4 percent in Danville to 2.2 percent in Northern Virginia.