Maryland employers made up most of April's lost ground with a gain of 4,600 jobs in May, but the state's unemployment rate still rose to 6.7 percent, the U.S. Department of Labor said Friday.
The jobless rate was 6.5 percent in April. Maryland was one of 17 states to see its unemployment rate rise.
But it was among 33 states, plus the District of Columbia, with a gain in jobs. Many of Maryland's large sectors expanded employment in May, according to the federal estimates — which are preliminary and adjusted to try to account for seasonal fluctuations in hiring and layoffs. At the same time, 3,400 more Marylanders joined the labor force, either landing jobs or looking.
"It's a pretty decent job report," said Daraius Irani, director of the Regional Economic Studies Institute at Towson University. "The fact that people are coming back to the labor market does indicate that people are feeling more confident."
The overall gains in May weren't quite enough to make up for the 4,900 jobs lost in April, according to the Labor Department estimates. Still, April's cut wasn't as deep as the 6,200 lost jobs the Labor Department originally estimated.
About 1,800 of the 4,600 jobs added in May were at government agencies. The rest came in the private sector.
The biggest gainer — with 4,400 additional jobs — was professional and business services, a sector that includes technical fields such as engineering, accounting and scientific research. The retail-heavy trade, transportation and utilities sector also saw significant growth, adding 2,200 jobs, the Labor Department said.
But some sectors cut back, most notably construction, which shed 3,100 jobs.
Also on that list was the education and health services sector, long a consistent source of new jobs. Employers in that category cut 600 positions in May — the second straight month of reductions. Hospitals have warned of layoffs, blaming federal budget cuts and state-set reimbursement rates that the industry considers insufficient.
Economists say Maryland — rife with federal agencies and contractors — is particularly vulnerable to the across-the-board federal cuts known as sequestration, which began this year.
Irani suspects that sequestration had an effect in May, despite new jobs. The budget cuts are a drag on Maryland growth, he said. He said he wouldn't be surprised if the state's job base bumps up and down in the next several months — more up than down, but not in a big way.
Drew Greenblatt, president of Marlin Steel Wire Products, a Baltimore manufacturer, is frustrated about the ripple effect from uncertainty over the bottom-line impacts of sequestration and health care reform. Lack of clarity casts a long shadow, he said.
"When people are kind of confused, they do nothing because they don't know what to do," said Greenblatt, who sits on the National Association of Manufacturers' board. "When people say, 'I'm going to pause,' English translation — 'I'm not hiring.'"
One company that does plan to hire is North Star Group, a Washington professional services firm that helps government agencies and businesses with project management, systems engineering and the like. North Star opened a Baltimore office last month. Officials expect to move about a dozen employees there in the next few weeks and to hire half a dozen more this year.
Bob Olsen, North Star's chief executive and owner, said the company's lease is about to run out on one of its two D.C. offices. He wanted a second location that was less expensive and more convenient for Maryland employees.
He's one of them: He lives in Baltimore County, a four-hour round trip from company headquarters in downtown Washington. Now he splits his time between the Baltimore and D.C. locations. He can hop on the free Charm City Circulator from his South President Street office, pick up the MARC train at Penn Station and go to Washington during the day if he needs to.
"All of our folks that have kind of transferred up here have been very, very happy with the location," Olsen said. "Close proximity to places to eat, nice setting, it's right on the harbor. ... And commuting costs — some of them have seen 70 to 80 percent savings in parking and trains."
All told, Maryland had 35,600 more jobs in May compared with a year earlier, the Labor Department said. With the May gain, the state is 7,100 jobs shy of the number it had before the recession took a big bite out of the job base.
The nation is about 2.4 million jobs away from that threshold.