Maryland unemployment dips to 6.3 percent

MD was one of 31 states to see unemployment rate decline last month

Maryland added about 2,800 jobs in September, enough to make a slight dent in the unemployment rate, but too few to signal significant growth, economists said Tuesday after the release of a monthly report by the Bureau of Labor Statistics.

The addition of 3,300 government jobs last month masked the loss of 500 private-sector jobs. That helped to drive down the unemployment rate, which dipped to 6.3 percent last month, down from 6.4 percent in August and 6.5 percent in September 2013.

Still, it remained higher than the national average of 5.9 percent.

"Overall I would say the numbers are anemic," said Richard Clinch, an economist for the Battelle Memorial Institute.

Since the start of the year, Maryland has added 8,500 jobs — essentially flat in a state where some 2.6 million people are on the payroll. The number of people seeking work has increased, even as the population in the labor force has fallen.

The slowly shrinking labor force could pose a long-term problem, making it more difficult for Maryland to attract businesses, economists said.

"If people are leaving the labor force, that makes it difficult to attract employers," said Gus Faucher, a Pittsburgh-based senior economist for PNC Financial Services Group. "That's definitely a negative for long-term growth."

Some sectors are doing better than others.

Professional and business services — a sector that includes government contractors — added 3,400 jobs in September, with payrolls up about 1 percent since the start of the year. Employers engaged in financial activities added 300 jobs in September, continuing a 3.5 percent expansion so far this year.

But other sectors posted losses, including education and health care services, which shed about 1,200 jobs in September. Payrolls in that industry — typically an area of strength for Maryland — are up about 1 percent for the year.

Gary Keith, a regional economist at M&T Bank Corp., said the sector may be figuring out how to adjust to new federal regulations and could remain unsteady for some time.

"We probably will have to get used to health care being a lot more volatile than it's been, with the Affordable Care Act and ramification for providers around what they do to address on the one hand more people being insured and on the other hand tighter margins," he said.

The public sector has historically fueled Maryland's economy, but slower growth in federal spending has kept hiring in check. Despite last month's gains, about 502,200 people were on government payrolls last month in Maryland, down by about 900 since the start of the year.

"The crux of the matter here is Maryland is in a long-term economic adjustment as it diversifies its economy," Clinch said, adding that the state's universities and other assets make it well positioned to diversify. "We have these strengths. The question is, how do we deploy them?"

Nationally, 31 states saw their unemployment rates decline, as the number of jobs increased in 39 states and Washington.

The job estimates are preliminary and subject to revision. The bureau Tuesday revised its estimates of job growth in August, finding Maryland employers created 1,200 new jobs that month, double the initial projection of just 600.

"While the economy overall is not where everybody wants it to be, just hearing from our guests and seeing the increased number of jumpers kind of gives us an indication that things are slowly but surely getting better," said Baltimore-based businessman Braden Holcomb, who opened his first Sky Zone franchise in Kansas City about two years ago and plans to open his fourth in Timonium next month.

His firm is hosting a job fair Saturday at its new Aylesbury Road facility to fill about 100 part-time positions at the indoor trampoline park.

"Hopefully we can get a couple hundred people out there," he said.

nsherman@baltsun.com

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