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Unemployment rate continues to inch upward in Maryland

Maryland's unemployment rate in September continued to inch upward for the fourth straight month, according to U.S. Labor Department data released Friday. But economists saw positive signs in the fact that more people reported that they were in the workforce.

The Maryland jobless rate rose to 7.4 percent last month from 7.3 percent in August. This year's low was 6.8 percent in May.

Because the jobless rate is based on a survey that asks whether people are employed or looking for work, the increase could indicate that discouraged workers who had been sitting on the sidelines have resumed their job search.

"Since you're seeing a little more labor force participation to go along with [the unemployment rate], maybe it encouraged their outlook," said Sara Kline, who studies Maryland's economy for Moody's Analytics.

But Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute, said it could also mean that discouraged jobseekers have become more desperate and need to look for jobs.

"You could be about to lose your house or you could think things are going to get better," he said. But Clinch warned against putting too much emphasis on month-to-month data.

The number of jobs in Maryland rose by 12,300 since last September and by 14,900 so far this year, according to the Bureau of Labor Statistics. Preliminary data shows Maryland added more than 6,800 jobs in September. The bureau also adjusted preliminary estimates of August employment numbers, to 4,000 jobs lost rather than the 2,500 originally estimated.

Alexander M. Sanchez, secretary of the Maryland Department of Labor, Licensing and Regulation, said most of the jobs lost were in the local government sector, but he was unable to say which municipalities cut jobs.

He said Maryland added 10,000 private-sector jobs in September. However, nearly half do not appear to be true gains because 4,400 Verizon workers in Maryland were on strike in August but back on the job in September.

That represents the 4,000 information sector jobs added in September, according to the Department of Labor, Licensing and Regulation. But hiring took place in other sectors as well.

"We've done a good job of maintaining growth this month across different industries in low-, middle- and high-skills jobs," said department spokesman Mike Raia.

Clinch said the 7,400 jobs added in the administrative and support services sector this year could be promising. About 4,000 of those jobs, which include temporary workers, came in September.

Temporary help agencies are typically a leading indicator of improvement, which could mean that businesses are hiring to meet demand and those jobs could turn into long-term jobs, he said.

This week, Gov. Martin O'Malley signed an executive order requiring state agencies to review regulations to identify those that could be changed or eliminated to spur faster job creation.

Nationally, the unemployment rate remained unchanged at 9.1 percent in September, half a percentage point lower than for the same period a year ago. In Maryland, the jobless rate was unchanged from a year ago.

The University of Baltimore also released its third-quarter Maryland Business Climate Survey this week. Clinch said it showed that businesses, particularly in the Washington suburbs, were less optimistic than those elsewhere in the state for the first time in his memory.

However, given the study's small sample of 250 businesses, that can't be called a trend unless supported by next quarter's survey.

"The survey results are really about the uncertainty in the direction of federal spending coming home to Maryland," Clinch said.

Maryland's economy has become more dependent on federal spending, he said. As a result, the state has fared better during previous recessions.

"I think government contractors are coming down to be more pessimistic or as pessimistic as everyone else," Clinch said. "This engine of growth is sputtering out, and Maryland's economy needs to find new private sector-led sectors of growth.

"We need our government-contracting sectors to do it not just for the government but for companies around the country and preferably around the world," he said.

In the 1990s, Maryland faced a slowdown of government projects after the end of the Cold War. But that came amid better economic conditions and the state was better able to prepare to diversify the economy, Clinch said.

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