Maryland gained 8,900 jobs in November, the federal government estimated Friday — a decidedly up month in an up-and-down year held back by Washington budget cuts.
Better job growth after a difficult few months pushed the state's unemployment rate to 6.4 percent in November from October's 6.7 percent, the U.S. Department of Labor said.
Sequestration overshadowed 2013 in Maryland, which has an outsized share of federal workers and contractors, economists say.
The state downshifted from a monthly average of 3,000 new jobs in the 12 months before the spending cuts took effect in March to about 1,000 since, said Bradley Turner, an associate economist at Moody's Analytics. That includes November's big gain as well as a steep cut in September in the anxious run-up to the partial government shutdown in October.
But the budget deal approved by Congress this week should be a turning point for Maryland, Turner said. He and another economist who analyzes the state's economy expect a faster pace of job creation in 2014. And on Friday, the federal government boosted optimism about the nation's overall recovery when it said third-quarter economic growth was the fastest in almost two years.
"We're expecting employment to come back pretty quickly over the next several years," Turner said.
Gov. Martin O'Malley, speaking Friday at a Hanover cybersecurity firm, also characterized the new federal budget as a boon for Maryland's economy.
"We cannot underestimate the amount of good that does for business and investor confidence in this area," he said.
That's especially true for government contractors. The deal offers certainty about near-term spending, eases the threat of another shutdown in January and "basically nullifies the impact of sequestration over the next two years," Turner said.
Cybersecurity — protecting data and networks from attacks and other threats — was a growth area even under sequestration. KEYW in Hanover, where O'Malley visited Friday, hired 170 people this year and said it has about 160 vacancies it still needs to fill.
"Now that we have a budget, we expect to hire even more people," said KEYW CEO Leonard E. Moodispaw.
Economists say the budget deal also helps businesses that do no work with the government. The long drag of continuing resolutions, brinkmanship and uncertain regulatory policies negatively affected the overall economy, they said.
"It's been not a good situation for businesses to be in," said Daraius Irani, executive director of the Regional Economic Studies Institute at Towson University. "Everybody wants to know what kind of environment you're working in."
Nationwide, at least, the economy was already picking up steam before the budget deal. The gross domestic product increased at a 4.1 percent annual rate in the July-through-September period, compared with 2.5 percent the previous quarter, the U.S. Department of Commerce said Friday.
"The underlying momentum in economic activity shifted up a gear in the third quarter," said Millan Mulraine, deputy chief U.S. economist at TD Securities in New York. "The strength in domestic consumption and investment activity points to a more constructive narrative on growth than previously thought."
In November, meanwhile, most of the country posted job gains — Maryland and 42 other states. The numbers, adjusted to try to account for normal ups and downs such as retailer hiring for holiday shopping, show expansion in more than half of Maryland's large sectors.
Professional services, a sector heavy with government contractors, added 3,100 jobs last month. That could include the return of furloughed contractors, whose jobs temporarily disappeared for purposes of the monthly tally if they weren't paid at some point during the second week of the shutdown. (The jobs of furloughed federal workers didn't drop out of the count because they received back pay, the Labor Department said.)
Construction and government each added 2,300 jobs, the Labor Department estimated. Retailers added 2,200 jobs, which with seasonally adjusted numbers means the agency saw more hiring than in recent years.
Though Maryland now has slightly more jobs than it did just before the recession, there's still a long way to go for full labor market recovery. About 200,000 Marylanders were unemployed and looking for work in November, double the number of six years earlier.
That puts a lot of people in competition for open positions. Consider the stampede for the approximately 130 jobs Maryland Live Casino in Hanover is trying to fill, ranging from dealers to food servers to operation managers.
"We've got over 20,000 applications in the queue," said Howard G. Weinstein, who oversees human resources for the casino as its general counsel.
But the state's job numbers are at least on the right side of the recession break-even point. The United States has nearly 1.3 million jobs still to go before it gets there.
Both Moody's Turner and Towson University's Irani expect Maryland employers to add about 40,000 jobs next year. If that comes to pass, it will almost certainly be an improvement on 2013: The state gained 28,000 jobs this year through November.
Baltimore economist Anirban Basu is forecasting less growth next year, about 25,000 jobs. He expects consolidation in education and health services, an important sector for Maryland.
"I try to be conservative in my forecast," said Basu, head of economic consulting firm Sage Policy Group. "If it turns out to be more than 25,000, that's great."
Leo Kelly, managing director at HighTower's Kelly Wealth Management in Hunt Valley, whose clients include entrepreneurs and other business executives, said he's seeing a rising level of confidence from that crowd lately.
His clients don't like government-caused uncertainty. The budget deal hardly erases all of it: Delaying the health care mandate for employers by a year, for instance, means more time for businesses to wonder what new hires actually will cost them.
Still, fewer self-inflicted crises would be good. Washington dysfunction isn't business-friendly, Kelly said.
"It doesn't stop a business owner who needs to buy a piece of equipment to keep growing or hire that person because they have orders come in, but it does stop people from making forward-looking investments," he said. "It hurts their risk-taking ability. And to grow an economy, you need that."
Reuters contributed to this article.