Md. employers add jobs, but unemployment rate rises

A five-month stretch of job losses in Maryland ended in August with a small gain, too meager to keep the state's unemployment rate from ticking up to 7.1 percent, the U.S. Department of Labor said Friday.

And some economists said even the apparent job increase in August looks suspect. The labor agency, which measured losses in most major industries and both federal and state employment that month, estimated a 1,400-job gain overall as a result of a 6,700-job increase in local government. An expansion of that scope would be unusually large — more than the typical increase in an entire year — and comes as local governments face budget pressures.

"It is surprising to see a jump like that, and I would think it's more of a statistical anomaly rather than real job gains," said James Bohnaker, an associate economist with Moody's Analytics. "This is just another bad month."

Maryland's jobless rate remains below the nation's, which was 8.1 percent in August, but it has been on the rise each month since pausing in May at 6.7 percent.

At the same time, the pool of Marylanders who are either employed or are actively looking for work shrank, a troubling sign that would-be workers are becoming discouraged. In a normal economy, that figure grows.

The federal estimates, which are preliminary, are adjusted to try to account for seasonal patterns in hiring and layoffs. They're often revised as more information comes in, and the revision for July painted a more negative picture of that month than the agency's original estimate.

Rather than adding 800 jobs in July, Maryland employers cut that many, the Labor Department said Friday.

Bohnaker said he thinks anxiety over the so-called "fiscal cliff" is the key reason. Unless a deeply divided Congress acts, tax cuts originally passed under President George W. Bush will expire in January and automatic spending reductions will begin. Both changes are likely to hit many taxpayers and companies.

In Maryland particularly, government is big business. Some of the state's largest employers are federal agencies and contractors, and they're bracing for the sequestration cuts of $109 billion a year for nine years that are set to begin Jan. 2.

Contractors are working overtime to stop the sequestration. The Aerospace Industries Association, a trade group that includes big defense contractors, predicts huge job losses across the country, with some of the biggest hitting Maryland.

Daraius Irani, director of Towson University's Regional Economic Studies Institute, said Congress' decision to put off major budget matters until after the November elections extends the uncertainty hanging over Maryland's job market. He believes federal budget issues are to blame for the state's "pretty anemic" job growth over the last year — an increase of just under 1 percent compared with August 2011.

"I suspect a lot of this is driven by the fiscal cliff, the nervousness people are experiencing," he said. "My wife is at Northrop Grumman; they're not hiring."

Goodwill Industries of the Chesapeake, a nonprofit that helps connect local residents with training and employment, held a job fair in Baltimore this week that drew 177 job seekers — 20 for every employer that showed up.

David Matthew Duffany, who lives with a friend in Baltimore to keep his costs down while he hunts for work, hoped for the best as he went from table to table. He said his job with a government supplier transferred from Maryland to Florida in 2010, but then the small company went belly-up several months later.

He moved back to Maryland in November, thinking the job search would go better here. So far, no luck.

"It's a saturated job market," said Duffany, 36, who figures he's sent out more than 1,000 resumes in the past year. "It's really frustrating as a job seeker because I don't know where to go."

Kiara Robinson of East Baltimore has a job working security for Ravens games, but she's looking for more hours — perhaps a job in customer service or health care. She said she sees openings, but most don't come with training, and she thinks that's a barrier.

"I'm a good worker. I'm a hard worker," said Robinson, 23. "Train me — you only got to tell me once."

David Anderson, looking snappy at the job fair in a suit and hat, wants part-time work. He's 69 and retired, and he'd like to fill some empty hours — and, more importantly, an empty bank account. His pension and Social Security checks just aren't enough.

"It's hard to stretch … from one month to the next," said Anderson, who lives in Baltimore's Mount Vernon neighborhood.

jhopkins@baltsun.com

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