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Maryland adds 10,500 jobs in February

BusinessUnemployment and LayoffsJob MarketFederal ReserveUnemployment RateTowson University

Maryland employers punched the accelerator on job creation in February, adding 10,500 positions and bringing the state much closer to recovering its recessionary losses five years after they began.

The job growth estimates released Friday by the U.S. Department of Labor also pushed the state's unemployment rate to 6.6 percent from 6.7 percent in January.

February's growth, split between the private sector and government, was the third straight month of above-average gains. Maryland employers added 5,300 jobs in December and 7,500 jobs in January.

"The state's doing fairly well, in spite of the perceived head winds — in spite of the uncertainty in Washington, D.C.," said Daraius Irani, director of the Regional Economic Studies Institute at Towson University.

"I'd like to say that I believe this is going to be sustainable," said Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute. "I'm just worried about sequestration."

Those across-the-board federal budget cuts officially started March 1. But the real impact is still to come. Furloughs of some federal workers are scheduled to begin later this spring.

As things stand now, Maryland is about 9,000 jobs shy of pulling back to levels unseen since the beginning of 2008. Employers in Maryland cut nearly 150,000 jobs from that year through early 2010 in reaction to the nation's worst economic crunch since the Depression, according to federal statistics.

"It's been a long, slow slog to get back to where we were," Irani said.

But full recovery — a return to the low unemployment rates Marylanders are used to — could be years off, even with unhindered expansion. Students continued to graduate as the job base shrank, leaving more workers competing for fewer jobs.

All told, about 208,000 Marylanders without jobs were looking actively for work in February, twice as many as there were five years ago.

The problem persists nationwide.

"If the economy adds about 208,000 jobs per month, which was the average monthly rate for the best year of job creation in the 2000s, then it will take until April 2020 to close the jobs gap," the Brookings Institution's Hamilton Project said earlier this month.

Maryland's gap — the hole that needs to be closed to return to the prerecession percentage of employed residents — is nearly 160,000 jobs, the Hamilton Project estimated.

Maryland's growth in February spread across almost all major sectors, from construction to professional and business services, according to the Labor Department's seasonally adjusted figures. But government agencies accounted for a large chunk — about 40 percent.

The 4,500-job gain in that sector — which came almost entirely at the local-government level — struck Clinch as a potential statistical hiccup, given that government shed jobs in three of the previous four months. The figures are estimates drawn from surveys and can be revised later.

"There's nothing that we have heard that would trigger such growth," said Andrea Mansfield, legislative director at the Maryland Association of Counties. "Things haven't turned around that much."

Still, the private sector gained 6,000 jobs in February, according to the Labor Department estimates.

Columbia-based BoxTone, which helps businesses manage the burgeoning mass of smartphones and tablets used for day-to-day work, is among the companies expanding.

The company, which employs 150, is adding jobs at its local headquarters and opened a second office — in California's Silicon Valley — last month. So far this year, BoxTone has hired about 20 new workers and expects to add 40 more by June.

"We have signed new partnerships, new contracts and identified new channels where we're having dramatic revenue growth," said Brian Reed, BoxTone's chief marketing officer and chief product officer. "We need a team to … support that."

It's a fast-growing market. Thirty percent of U.S. companies have some type of mobile-device management now, a figure that will probably rise to over 40 percent by the end of the year, said Phillip Redman, a mobile wireless analyst at technology research firm Gartner.

Whether the state as a whole can keep up with its recent growth pace is a topic of considerable anxiety, given sequestration cuts. Maryland has large numbers of federal contractors and workers.

"I'd like to have my pessimism proven wrong," Clinch said. "However, I worry about what's going to happen."

He's not alone. Three-quarters of Marylanders believe sequestration will be bad for the state's economy, according to a Goucher College poll conducted this month. Almost half think the cuts would affect their finances in a negative way.

Goucher surveyed 791 residents and put the margin of error at about 3.5 percentage points.

Frequent furloughs could ripple widely as federal employees cut back on spending. But the Department of Defense — which has just over 45,000 civilian workers in Maryland — said Thursday that its original furlough plan has been scaled back after the agency received more flexibility about how to cut.

Affected civilians will likely see 14 unpaid days off, rather than 22, the Pentagon said. The first are expected in June. Nondefense agencies have a variety of furlough plans, some beginning sooner.

Early indicators suggest good prospects for the state's March job growth. Thirty percent of Maryland businesses surveyed this month by the Federal Reserve Bank of Richmond said they added workers, compared with just 8 percent who cut back, an improvement over February.

But the Fed warned that employers are less optimistic about hiring in the next six months. Twenty-nine percent expect to add employees, while 23 percent anticipate cuts.

jhopkins@baltsun.com

twitter.com/jsmithhopkins

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