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Maryland firms added 1,900 jobs in January

After a weaker-than-previously-understood 2015, Maryland's labor market continued to see modest job growth in January.

Employers added 1,900 jobs in the first month of the year, pushing the state's unemployment rate down to 4.9 percent, the Labor Department said Monday.

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The small January improvement was consistent with the rest of Monday's report, which revised more than a year of data, reducing the number of jobs added statewide in 2015 by more than 10,000.

"The year-over-year numbers for Maryland are not nearly as good as they had been, but they're still solid," said Anirban Basu, economist and CEO of the Sage Policy Group, an economic consulting firm. "It's certainly not bad."

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Maryland was one of 30 states to experience job growth in January, when the gains were weaker than some had hoped. But February saw stronger hiring nationally and economists said the state's story also might appear brighter when those numbers are released later this month.

"One month does not a trend make," said Sonya Ravindranath Waddell, a regional economist for the Federal Reserve Bank of Richmond. "Over the year, Maryland is actually doing pretty well."

The state is bouncing back from the effects of spending constraints and the 2013 government shutdown, with the rate of job creation nearly catching up to the rest of the country, Waddell said.

The largest monthly gain in January occurred in the professional and business services sector, which added 2,800 positions. The hiring was led by firms focused on areas such as tax preparation, accounting, payroll and computer systems designs, according to the state Department of Labor, Licensing and Regulation.

Additions in that sector — a grab bag category that includes government contractors — are typical for Maryland, but the report also held surprises.

The education and health services sector reported a loss of 4,900 jobs, cuts which, if true, would wipe out nearly a year of gains in industries that are historically some of the state's strongest. (Economists said they suspected a statistical fluke or change in measurement.)

Also unusual was the addition of 900 manufacturing jobs in January. It was the first December since 1997 that the sector had more jobs than the previous December.

"It really is an aberration because we've seen that sector under so much stress," said Gary Keith, regional economist for M&T Bank Corp. "We may not see that continue, but certainly it broke out of its downward trend."

Baltimore's Maritime Applied Physics Corp., an employee-owned engineering and manufacturing firm best known for its unmanned, drone boats, has brought on about five people in the last month, most of them on the manufacturing side, said CEO Mark Rice. It expects to add an additional five over the course of the year.

Two new contracts — one government and one private — have fueled growth at the firm, which had just more than 50 employees before the new hires, he said.

"Between the economic downturn and the sequester … those two things had kept us very flat for the last three years, so this was a great, long-anticipated change for us," he said.

Since January 2015, Maryland employers have added 44,800 positions, a growth rate of nearly 1.7 percent, the Department of Labor reported.

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In the Baltimore metro area, firms added about 5,600 jobs between December and January. The region's year-over-year job creation rate was about 1.7 percent too.

Economists said they were not too surprised by the revisions to 2015, which matched other data that had been reported over the course of the year.

The Bureau of Labor Statistics updates — an annual process known as benchmarking — meant the number of jobs in Maryland in December was about 1.6 percent greater than it had been a year before, not 2 percent as previously reported.

"I always thought that the 2015 numbers were overstating our pace of job creation," Basu said. "The numbers now seem to be more consistent with what we observed."

Government employment in January increased by 2,300 and construction firms added 800 positions, while employers in the trade, transportation and utilities sector cut 1,300 jobs.

The state's 4.9 percent unemployment rate in January was in line with the national average and down a tenth of a percentage point from December.

As more people find jobs and have paychecks to spend, that should drive further economic growth, Keith said.

"All in all, I'd say a pretty upbeat report for starting off the year," he said.

Since many of the new positions created in the last few years have been in lower-paying fields, Maryland still is waiting to see significant wage growth, even as growth continues, said Daraius Irani, economist at Towson University's Regional Economic Studies Institute.

"The one big issue obviously is wages," he said.

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