Maryland's economy shed 3,100 jobs in November, the latest U-turn in a bumpy year overshadowed by the fast-approaching "fiscal cliff," according to federal data released Friday.
The U.S. Department of Labor also sharply revised downward its estimate for October, saying that Maryland employers added 4,700 jobs rather than the 14,000 in its preliminary report. Maryland's unemployment rate in November fell slightly to 6.6 percent, possibly the result of more people commuting out of state or starting their own businesses.
But all that strikes economist Richard Clinch as background noise compared to the increasing risk that Congress and President Barack Obama will not find a compromise by the end of the year to avoid going over the so-called fiscal cliff — a series of automatic federal spending cuts and tax increases, as temporary breaks expire.
Clinch and other economists have argued that these budget and tax changes would be particularly bad for Maryland, a high-income state with an oversized share of federal jobs and contracting.
"The fiscal cliff will be devastating for Maryland," said Clinch, director of economic research at the University of Baltimore's Jacob France Institute. "And there's nothing anybody can do about it in Maryland except brace for it."
That's because finding an alternative — or not — is entirely up to lawmakers in Washington, and disputes about what to do aren't dividing just Democrats and Republicans. House Speaker John Boehner wasn't able to get enough support from his own party Thursday for his Plan B proposal for avoiding the cliff, which would have extended current tax rates for everyone except those earning $1 million or more.
The run-up to the cliff's January start date has been so long — political debate has been mired for more than a year — that economist Daraius Irani thinks that explains Maryland's start-and-stop job growth in 2012. Some months saw strong job growth, while others saw contraction.
All told, employers added about 16,000 jobs in the state over the 12 months ending in November, well below last year's gain of 30,000 jobs.
"This whole year has just been a year of uncertainty," said Irani, director of Towson University's Regional Economic Studies Institute.
Maryland was one of 20 states, plus the District of Columbia, that lost jobs in November. Declines were spread across most major sectors in the state, but the striking example was retail — down 3,200 jobs, according to the Labor Department.
The agency's estimates are adjusted to try to account for normal seasonal patterns in hiring and layoffs, allowing for month-to-month comparisons. In the case of retail, the November figure was the result of a much smaller expansion of temporary holiday jobs than what the state typically sees. The unadjusted numbers don't show an actual loss.
And some temporary jobs may have been filled earlier this year. September and October retail gains were larger than usual.
Patrick Donoho, president of the Maryland Retailers Association, said members told him that their holiday employment would be slightly higher than it was last year.
Donoho said he received good reports of sales around Thanksgiving, but the pace of purchases has slowed more recently. He's not sure why, but he noted that there's no question that a "threat" like the fiscal cliff can give people pause about spending.
"If there's a threat, then that impacts consumer confidence; consumer confidence impacts retail sales," he said. "The consumer has changed since the recession. … They will tighten their wallet if their confidence goes down."
A bright spot amid all the anxiety: The unemployment rate fell to 6.6 percent from 6.7 percent a month earlier as more Marylanders entered the labor force.This survey of residents is separate from the payroll survey of jobs, and the two don't always move in the same direction — in part because taking a job across state lines or becoming self-employed doesn't affect the Labor Department's estimate of jobs in Maryland.
The number of Marylanders counted as unemployed — out of work and actively looking for a job — dropped to about 204,000 in November, down almost 3,800, the Labor Department said.
But workforce experts are quick to point out that this estimate doesn't capture the full extent of job distress. Elliot D. Lasson, executive director of Joblink of Maryland, a Baltimore nonprofit that connects job seekers and employers, said he works with as many "underemployed" people searching for more hours or higher pay as he does with unemployed residents.
He's seeing openings in accounting and related occupations these days, as well as for technical jobs that require security clearancesand are hard to fill, he said. But many other fields are tight. And for job seekers still reeling from the effects of the recession, it's particularly tough, he said.
"You have that cumulative effect — the cumulative effect of being unemployed or underemployed for a long time," he said.