WASHINGTON, DC-The Washington DC area typically posts about900,000 square feet of positive absorption everyquarter for office product. Not this quarter, however. According toCassidy Turley, it is posting nearly 100,000 square feet ofnegative absorption for Q2.

We can thank cut backs in government spending for that, alongwith a slightly off-kilter job market. "The effect of the federalcontraction is particularly acute in government-contractor-heavyNorthern Virginia, and therefore, the fiscal drag is mostnoticeable there," Nathan Edwards, Director of Research, says in aprepared statement. But tenant-downsizing is also a problem, hecontinues. "Whether it's due to technology, new space efficiencyplans, or smaller headcount, businesses are simply signing for lessoffice space in this recovery, so we are not getting the same popin demand from job growth that we are accustomed to getting."

Also, while the DC area's private sector may be creating jobs,the federal sector is trending in the opposite direction. Thelosses are also accelerating. Compared to an average loss of 80jobs per month a year ago, Washington, DC is now recording over 600federal government job losses per month since year-end 2012,Cassidy Turley finds.