Given that, among the 50 largest metro areas in the country, Washington D.C. has the second lowest unemployment rate and the second highest rate of employment growth, it arguably has the strongest economy in the country.

This is not to say that the nation’s capital has come through the recession unscathed. It has emerged from the downturn more quickly, however, and in much better overall economic health, largely due to sustained growth of government hiring.

Indeed, over the past year government employment has risen by 16,700, well ahead of the only other sectors to add jobs over the past year: professional and business services (+4,900) and education and health services (+4,600).

This relative economic health of Washington is also reflected in its housing market, where house prices, based on the Case-Shiller index, are up by 1.9% year over year and median existing house prices are up by 3.8% year over year in the fourth quarter, compared to a 4.1% drop for the nation as a whole.

Also, the relative strength of employment in Washington, together with sustained net-immigration, has helped to underpin rental demand and caused apartment vacancy rates to decline from 6.7% in Q4/2008 to 6.5% in Q4/2009. 

Just as it took time for the Washington economy to slow down, it appears likely that it will take time to speed up, given the counter-cyclical pattern of government spending.

Having said this, there are some indications the metro areas economy will continue to expand at a healthy pace over the next several quarters. 

Hiring intentions in Washington, both in the public and private sector, are the third strongest in the country, according to the Q1/2010 Manpower Employment Outlook Survey.

Job prospects are particularly strong in construction, non-durable goods manufacturing, transportation and utilities, and financial activities and government.

This positive hiring climate is consistent with the solid 1.9% year-over-year increase in the Washington Area Leading Index, and with the solid rise in the South Atlantic Index of Consumer Confidence.