Maryland's employment base shrank by nearly 10,000 jobs in January and grew at a much weaker pace last year than originally estimated, the federal government said Monday.
The state had about 23,000 more jobs in December than a year earlier, down from the initial report of 36,000 additional jobs, according to the U.S. Department of Labor's Bureau of Labor Statistics. That revision is enough to change 2013 from the state's best year since the recession to its worst for job creation.
It also means Maryland has yet to get back all the jobs lost in 2008 and 2009 — a threshold the state appeared to cross last year. Economists said the new figures for 2013, revised as more information came in, show the drag that federal cutbacks and the partial government shutdown had on the state.
"The Maryland economy was growing less rapidly than we all thought," said Richard Clinch, a locally based research economist at Battelle Memorial Institute. "These are very troubling signs."
But while he's concerned about the trendline, he and PNC economist Gus Faucher both doubt January was as bad as the preliminary estimate — a 9,800-job reduction — would imply.
Faucher thinks bad weather temporarily suppressed the numbers, a problem for the country as a whole that month. Clinch noted that Maryland saw no uptick in new unemployment-benefit claims.
January unemployment figures, in fact, show improvement. Maryland's jobless rate fell below 6 percent for the first time in five years, as state Labor Secretary Leonard J. Howie III was quick to point out Monday. The drop from 6.1 percent in December to 5.8 percent in January came as the pool of workers grew.
Gov. Martin O'Malley celebrated the unemployment rate's decline to its lowest level since November 2008, while acknowledging that "we still have more work to do."
"Despite January's preliminary jobs report from BLS indicating monthly losses, Maryland's economy continues to show signs of strength across a broad array of indicators," he added.
The jobs count and unemployment tally come from separate, volatile surveys that don't always move in the same direction. The federal Labor Department calculates unemployment after determining how many Marylanders are working — including across state lines and for themselves, neither of which are counted in the state jobs tally.
"The decline in unemployment has to be explained by the fact that more people are commuting into D.C. and Virginia," Clinch said.
While January figures zig-zagged, the newest numbers for last year tell a pretty consistent story, said Faucher, a senior economist who follows the region for PNC Financial Services Group. The pace of job growth fell and the labor force — the pool of people working or looking — shrunk by nearly 34,000 people.
Faucher thinks the labor force contracted as unemployed older workers retired by default, unable to find work.
"These are people who can be productive … but they just don't have the opportunities," he said.
Workers and would-be workers near the start of their careers also are having a challenging time, here and nationally. Young-adult employment hasn't recovered from the beating it took during the recession, according to the Washington-based Brookings Institution.
For Tyler Scheff, 23, who graduated from Towson University last May, that's meant juggling and strategizing.
He works 30 to 35 hours a week as a technician for a Baltimore optometrist while holding down an unpaid internship in his preferred field, marketing and public relations. The internship is his third. He plans to go back to school in the fall to pursue a master's degree in communications management, hoping that will make him a more marketable entry-level marketer.
"I've had a few interviews with some companies in the Baltimore area, but they've all replied back with the same thing — 'we found somebody with more qualifications,' or 'you don't have everything we're looking for,'" said Scheff, who lives in Parkville. "That's why I'm going to school, so I can have what they're looking for. … Something's going to come. I know it will."
Maryland's strongest sectors last year were construction — which added 7,800 jobs after a recessionary pummeling — and the leisure/hospitality sector, up 7,700 jobs. Manufacturing, information and government employers shrank.
Most of the jobs in the Labor Department's initial estimates that vanished when the agency did its major revision were in professional services. The sector is a mainstay for Maryland and includes many federal contractors.
The Labor Department said professional services employers added 5,900 jobs in the 12 months ending in December, instead of more than 15,000.
"Maryland is still feeling the impact of the federal government spending cuts," said PNC's Faucher, who expects 2014 job growth will look a lot like 2013.
February figures — due out the end of next week — will help shed light on whether January was a snowy anomaly. January's preliminary numbers show job losses hitting most sectors, from construction to retailers.
The figures are adjusted to try to account for normal seasonal changes in hiring and layoffs.
Maryland suffered less severe cuts than the nation as a whole in 2008 and 2009, but its recovery has been more tepid in the last few years. In 2013, the United States added jobs at nearly twice the state's pace.
Officials and business leaders have debated the state of Maryland's business climate for years — possibly decades — but the difficult recovery has prompted more efforts at improvement.
The Greater Baltimore Committee, a business and civic leadership group, is working on recommendations for changing the state's tax structure. The Maryland Chamber of Commerce is coordinating an effort on private-sector job growth that involves dozens of business groups.
And last week the General Assembly launched an economic competitiveness commission chaired by former Lockheed Martin CEO Norman Augustine.
The recession technically ended in mid-2009, but its effects have been hard to throw off, said Gene Bracken, a spokesman for the Greater Baltimore Committee.
"It's a sluggishness that's very tenacious," he said.
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