Maryland adds 9,800 jobs in June; unemployment rate falls to 4.3 percent

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Maryland's labor market surged ahead in June, with employers adding nearly 10,000 jobs and the unemployment rate continuing to fall.

The state added 9,800 jobs last month, the Labor Department reported Friday. The gain meant the state's job growth topped 2 percent on a year-over-year basis, outpacing the national rate for the fourth month in a row.


"It's good news to come into the summer with this kind of data," said Daraius Irani, chief economist at Towson University's Regional Economic Studies Institute. "It just shows that Maryland is slowly, slowly, steady-eddie, recovering."

Maryland's labor market lagged the rest of the country during much of the recovery from the last recession, but as national growth has slowed, the state's growth strengthened.


Analysts said consumer spending, the mainstay of the U.S. economy, is helping to drive the growth, despite economic uncertainty overseas and a jittery stock market.

"People are feeling more confident in the state of the economy and as a result, you're seeing pople going out, spending more money," said said R. Andrew Bauer, an eocnomist at the Federal Reserve Bank of Richmond. "You're just seeing a lot more consumer activity and people are hiring as a result."

The state unemployment rate fell to 4.3 percent, two-tenths of a percentage point lower than in May and sliding well below the 4.9 percent national average.

The state's strongest job gains came in the leisure and hospitality sector, which added 6,100 jobs in June as the summer tourism season got underway. Despite the Labor Department's adjustments for seasonality, some of the gains may be "amplified" by the tourism-related hiring, Bauer said.

But, he added, the growth is not out of line with earlier increases.

The state's job gains were broad-based. Payrolls at professional and business services firms swelled by 2,600, while the trade, transportation and utilities sector added 1,700 jobs. Even manufacturing added 300 jobs, though the construction sector was weaker than some anticipated, increasing by only 100 jobs.

Government payrolls fell by 1,900, while employers in financial activities reported a loss of 700 positions.

Maryland was one of 18 states that added jobs in June, as unemployment rates held steady in 43 states and Washington.


The new report also revised May's jobs report from a gain of 2,500 positions to a loss of 200.

In a statement released with the June figures, Gov. Larry Hogan cheered the data, which was powered by private sector growth. It also followed several announcements in recent months of large expansion plans from firms in the region such as Frito-Lay and Taylor Farms.

"Since day one, our administration has been committed to strengthening the economy and putting hard-working Marylanders back to work," he said. "The continued rapid growth of jobs in our state underscores our ongoing efforts to make Maryland more business friendly and create new opportunities for our citizens."

Tollos Inc., a medical supply company in Owings Mills, has brought on about five people at its 25-person headquarters in the last year as sales have increased and plans to add more, said CEO Jon Winer. The firm, which currently does about $50 million in sales a year, hopes to grow to $250 million in about five years, he said.

Winer said many of the orders for its products, including a device to help lift patients from their beds, are from repeat customers, including hospitals embarking on major expansions as the uncertainties created by the recession and health care reform ease.

"That was a tough capital spend market" for his customers, said Winer, adding that now the company is "on a roll."


Some of the decline in the state's unemployment rate reflected a smaller number of people working or looking for work. Since April, the number of people in Maryland's labor force has retreated by nearly 9,000, though it remains higher than last year.

Contractions in the labor force are often interpreted as a sign of labor market weakness, but economists said some fluctuation in those figures is to be expected, especially as the population in our region ages.

"The fact that the national labor force increased by so much more — that may be a little cautionary sign, but again that number is going to bounce around," said economist Richard Clinch, head of the University of Baltimore's Jacob France Institute.

While the most recent drop in the unemployment rate pushes it down to a level more common in Maryland before the recession, the wage increases many predicted have been slow to arrive.

Evidence from Friday's survey — data that is not seasonally adjusted — was mixed. It found the average hourly earnings in Maryland's private sector were $26.94 in June, 13 cents higher than last year, but about 50 cents lower than May.

As unemployment falls, some economists said they expect to see wage gains pick up in future months and hiring slow.


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"Even though we have low unemployment, I don't expect this to dampen growth or cause significant wage pressures in the near-term," Clinch said. "There are still what I would call discouraged workers out there."

Irani said he expects to see strong hiring continue into the winter, even amid uncertainty about what a new president will mean for government spending, which drives major part of the Maryland economy.

Utah-based Cookie Cutters Haircuts for Kids, which uses in-store playgrounds and special chairs to market its chain of hair salons to children, plans to open its first franchise in the Baltimore area in Lutherville-Timonium in August and hopes to open at least 12 more in the next three to four years as it expands across the country, said CEO Neal Courtney.

Each franchise employs seven to 10 people, he said.

Courtney said haircutting is a fairly recession-proof business, but even so he's not worried about the economy.

"The economy as it stands today is extremely strong," he said. "I'm very optimistic."