By Jamie Smith Hopkins, The Baltimore Sun
6:35 PM EDT, March 18, 2013
Maryland employers added 6,700 jobs in January, picking up the pace from the end of last year, the U.S. Department of Labor said Monday.
Businesses added 5,300 jobs in December, according to the agency's revised estimates. In both December and January, all gains came from the private sector as government agencies cut back — eliminating 1,500 jobs in each month.
January's uptick wasn't large enough to lower the unemployment rate, which held steady at 6.7 percent. The U.S. jobless rate was 7.9 percent that month.
Daraius Irani, director of the Regional Economic Studies Institute at Towson University, characterized the state's economic recovery as "OK."
Maryland has made up 86 percent of the jobs lost during and soon after the recession, which leaves 20,000 still needed to get back to the peak levels of early 2008, according to Labor Department figures.
What strikes Irani, though, is that a state so dependent on federal spending continued to add jobs in a month full of angst over the looming "sequestration" budget cuts.
"It's rather remarkably resilient," he said.
But it could take a while for sequester effects to be felt, he added. The federal budget-cutting plan, which requires across-the-board reductions to spending of about $85 billion this fiscal year, didn't kick in until March 1 — and many of the cuts will come later. Furloughs of federal employees, for instance, are expected to begin in April.
Irani said this effective pay cut will hit restaurants, retailers and other businesses that rely on consumer spending. The Department of Defense alone has 45,000 civilian employees who work in Maryland, and it warned in February of once-weekly furloughs of its civilian base from April through September.
Bradley Turner, an associate economist at Moody's Analytics, expects Maryland will see growth this year on par with last year's job creation — but spread unevenly through 2013. Moody's Analytics forecasts tepid job gains in the first half of the year, as a result of sequestration, with accelerating growth in the latter half.
Given the budgetary headwinds, Turner found the results for January "quite encouraging."
Most major sectors in Maryland added jobs that month. Professional and business services — which includes technical fields such as engineering and scientific research — saw the most growth, up 3,700 jobs. Other significant gainers: the construction industry, up 2,800 jobs, and the education and health services sector, up 2,700 jobs.
The only large loss — besides government — hit the trade, transportation and utilities sector, down 2,400 jobs. Retailers accounted for most of that reduction. Cuts to the government sector were spread across federal, state and local agencies.
The Labor Department adjusts its month-over-month figures to try to account for normal seasonal patterns in hiring and layoffs. Otherwise, it would be impossible to compare, say, December, when stores are staffed up for Christmas shopping, to January, when those temporary jobs are gone. The numbers also are preliminary and could be revised later, as more information comes in.
The Labor Department's revised snapshot of last year suggests employers added more jobs than the agency originally estimated — just over 26,000, rather than about 22,000, between December 2011 and December 2012. That lifted the total for the year above 2011's growth, but just shy of 2010's.
"Most of that strength is weighted towards the end of the year," Turner said. "That beat expectations — beat our expectations — and I think it's a very good sign for [how Maryland will handle] some of the difficulty that's certain to come, in terms of the sequestration."
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