Government hiring outweighed cuts in Maryland's private sector in September, but not enough to keep the state's unemployment rate from rising.
The 4,800-job gain in Maryland estimated by the Labor Department Friday — an upturn after two months of losses — was outpaced by the number of people newly looking for work. Job seekers joining the fray helped push the unemployment rate to 7.5 percent in September, from 7.3 percent in August.
Government agencies added 8,300 jobs in September, largely a result of hiring for local education, according to the estimates. Two of Maryland's other key employment bases, the education and health services sector and the professional and business services sector, also expanded. But other major industries contracted in September — particularly leisure and hospitality, which was down by 4,000 jobs.
The figures are preliminary — and they are often revised. The Labor Department now estimates that 7,300 jobs were cut from Maryland payrolls in August, a bigger drop than originally thought.
Charles W. McMillion, president and chief economist of MBG Information Services in Washington, says the economy stopped improving by late summer.
"The recovery in Maryland … has clearly stalled, as it has for the country," he said. "Maryland continues generally to do better than the country as a whole, but like the country as a whole the economy is really stuck and not producing very many jobs right now — if any at all."
McMillion considers the two-month trend more reliable than the one-month; the two-month trend shows Maryland down by 2,500 jobs.
Nationwide, two-thirds of states saw worsening job numbers in September, the Labor Department said. Few, though, reported rising unemployment rates. In some states, that's because discouraged job-seekers stopped looking for work and thus were no longer officially counted as unemployed.
The new jobs statistics take on a heightened importance because they represent the last snapshot of state employment before the November elections. In Maryland, both candidates for governor issued statements Friday emphasizing the parts of the Labor Department report they thought would help their campaigns.
"As the nation loses jobs, Maryland continues to add them," said Gov. Martin O'Malley, a Democrat.
Former Gov. Robert L. Ehrlich Jr., O'Malley's opponent and Republican predecessor, said, "Today's unwelcome news shows that our unemployment rate is bad and getting worse."
Ellen Valentino, state director of the National Federation of Independent Business, whose members endorsed Ehrlich for governor, said some firms that rely on government contracts are seeing their prospects improve. But many others don't have the confidence to hire, she said.
With the large federal deficit and state budget concerns, small businesses are worried that they'll end up with more taxes to pay next year, she said.
"If you don't know what lies ahead with respect to your tax liability, it's hard to make that new investment; it's hard to make that new hire," Valentino said.
Mary Jo McCulloch, president of the Maryland Hotel & Lodging Association, said the big drop in jobs reported for leisure and hospitality was surprising. Maryland hotels have been holding their own, she said. The job figures are adjusted to try to account for normal seasonal variations in hiring and layoffs, but those adjustments sometimes go awry, making the numbers appear better or worse than they really are.
"We're seeing [a] continual uptick in room reservations," said McCulloch, who is also president of the Maryland Tourism Council. "Much more of it is last-minute. Hotels have told me time and again that … they'll be looking at Thursday night saying, 'Gee, this is a pretty light weekend,' and by [the time] the weekend comes around, they're sold out."
A University of Baltimore survey of 250 businesses during the summer found that slightly more had sales increases than those seeing decreases. The same held true for hiring: 28 percent of firms employed more people than they did a year earlier, while 26 percent employed fewer.
During the spring, firms with declining sales and employment outnumbered the gainers, according to the survey, conducted by UB's Jacob France Institute.
Maryland had about 24,000 more jobs in September than it did a year earlier, Labor Department estimates show. Losses from the recession began in 2008, accelerated in 2009 and began to turn around in March.