Last month, Maryland saw its strongest hiring since 2010, a sign the state's long lackluster labor market may be starting to rev into motion.
Employers added an estimated 11,000 jobs in December, driving the state's unemployment rate down a tenth of a percentage point to 5.5 percent, according to U.S. Department of Labor data released Tuesday. Baltimore-area employers drove the upswing, adding an estimated 7,800 jobs.
"I can't remember the last time Maryland created 11,000 jobs. This is a large number," said Richard Clinch, a Maryland-based research economist at Batelle Memorial Institute. "It's a sign that things are improving."
Job creation in Maryland has spent months lagging behind the rest of the country, but Tuesday's numbers are a sign that employers here are starting to catch up, said Andrew Davis, an economist for Moody's Analytics. The state's new unemployment rate is below the national average, which fell to 5.6 percent in December from 5.8 percent a month earlier.
The Labor Department also released data showing Maryland added more jobs in November than previously estimated. The state gained 5,000 jobs in November, rather than 3,800, according to the new data. November's unemployment rate did not change from 5.6 percent.
The last time Maryland posted a monthly job gain of more than 11,000 jobs was May 2010. Year-over-year the state added 20,000 jobs.
Davis said he expects strong growth starting in the spring.
"Companies have focused for so long on cutting costs and using that to drive revenue, but I think they're at the point now where they've pretty much squeezed all they can out of their employees," he said. "They're going to have to invest if they want to see revenues grow."
More than 96 percent of the new jobs were created in the private sector, with 4,600 coming in the leisure and hospitality industries. That's a sign consumers are becoming more confident, economists and industry members said.
"Gas prices have come down dramatically and there's a sense that will contribute to the trend," said Ken Finkelstein, president of Bethesda-based Englewood LLC, the developer of the 208-room Hyatt Place hotel that opened in Harbor East in December. "People will have more money to spend and will feel better about filling up the tank to go on a trip or getting a meal."
The restaurant scene in the Baltimore area is booming, said Chris Becker, the CEO of Bagby Restaurant Group, which operates several restaurants that have opened in recent years, including Fleet Street Kitchen in Harbor East and Cunningham's in Towson. Bagby Group has 100-120 full-time workers and another 100-120 part-time across the group.
"Restaurants are opening up left and right. I think for a while there was a gap in the marketplace," said Becker, adding that restaurants typically need to hire more employees than in some other sectors, like marketing. "Part of the reason you see a spike in our sector is we have a lot of employees."
Leisure and hospitality jobs tend to be lower-paying, but even those will add juice to the economy, said Gary Keith, regional economist for M&T Bank.
"Any job is a good job because it leads to a paycheck," he said. "That leads to spending, which helps our economy move forward."
Mining, logging and construction added 3,000 jobs in December, while the education and health services sector added 2,900 jobs.
Losses came in the financial activities and professional services sectors, traditionally strong industries for Maryland.
Those losses, as well as continued numbers of people dropping out of the labor force, give some reason for continued caution, economists said.
"I'm still a little worried, but maybe this means the worst has passed," Clinch said.