After three months of significant job gains, Maryland lost 7,200 jobs in March even as more people joined the workforce, according to the latest federal jobs report.
While the growing pool of people working or looking for work indicates rising confidence in the economy, economists said, the new estimates released Friday by the U.S. Labor Department show that hiring isn't quite so strong. The state's unemployment rate in March nudged up a tenth of a percent to 4.3 percent, still below the national rate of 4.5 percent.
In addition to reporting the statewide loss of 7,200 jobs in March, the report revised February's strong gain down by 2,000 jobs to 9,500.
Combined, the March jobs loss and downward revision to February's gain could be "warning signs" of growing concern among employers about how proposed federal budget cuts will affect a state that relies heavily on the government, said economist Richard Clinch, director of the University of Baltimore's Jacob France Institute.
"I think what is likely happening is the uncertainty in the Maryland economy over the effects of government spending are becoming real," Clinch said. "We don't know what's going to happen, and the Maryland economy, whether we like it or not, is driven by the federal government."
Still, Clinch and other analysts cautioned against putting too much weight on the monthly job tallies, which are subject to revision, and pointed to a solid year-over-year gain in jobs in Maryland.
Since March 2016, Maryland companies have added 44,200 jobs, which analysts said was a positive sign that job growth in the state is keeping pace with population growth.
"It was a weak report for the month in terms of the number of jobs that were lost, but I don't see that as any signal that things are particularly weak for the state," said Andy Bauer, a Baltimore-based senior regional economist at the Federal Reserve Bank of Richmond.
State officials said they're focused on the long term.
"Maryland has gained more than 95,000 jobs since January 2015, and improving the economy and creating good-paying jobs for Marylanders continues to be our focus," Maryland Labor Secretary Kelly M. Schulz said in a statement.
Despite the March jobs loss, about 13,900 people joined the state's labor force in search of work, which Bauer said reflects growing confidence in the economy. The increase in people entering the workforce coupled with job losses was reflected in the uptick in the unemployment rate, but, he said, many people looking for a job still found one.
The job loss in Maryland was broad-based, with every private sector reporting a decline in jobs except professional and business services, and education and health services.
Bauer attributed some of the job loss to seasonal factors, such as weather.
For example, construction companies lost 4,500 jobs and leisure employers, such as restaurants and hotels, reported a loss of 2,700 jobs. Both sectors tend to be more susceptible to seasonal employment volatility, Bauer said.
The report estimated 800 jobs lost in the retail sector, which is facing significant store closures since the beginning of the year, including hh gregg, The Limited, Wet Seal and Marbles. Other retailers, including Sears, Abercrombie & Fitch and Payless Shoe Source are cutting back.
Meanwhile, the education and health services employers added 400 jobs. The public sector gained 300 jobs.
The professional and business services sector added 2,000 jobs, more than half of which were in a subsector that includes temporary workers. Clinch said that growth could indicate hesitation among employers to hire permanent employees.
"What we're seeing are employers being cautious and cautious for the right reason, which is [that] the real driver of the Maryland economy has said we're going to spend less," Clinch said.
Robert Half, a staffing and employment agency, has seen a swell in demand for temporary workers, said Amy Keitt, the branch manager of the company's OfficeTeam division in Baltimore, but she does not think it's because companies are being cautious.
Rather, she thinks the rise in temporary workers is a sign of the labor market's strength. A low unemployment rate means it takes longer for companies to find the right candidates. And confident about their job prospects, candidates are becoming more selective, she said.
"That work still has to get done while it takes time to make hires," Keitt said.