A strong surge in the service sector dropped Maryland's seasonally adjusted unemployment rate from 4.8 percent in February to 4.6 percent in March, the state Department of Labor, Licensing and Regulation reported yesterday.
According to the U.S. Bureau of Labor Statistics, this would be Maryland's lowest seasonally adjusted unemployment rate since before the recession in the early 1990s. However, a state spokeswoman said the way that unemployment rates were calculated then are different from now, so she could not confirm that Maryland's unemployment rate was at a multiyear low in March.
State officials said, however, that the Maryland economy remains strong.
"The unemployment rate is half a percentage point lower than a year ago, is lower than the national average, and the employment level represents a record for March," Gov. Parris N. Glendening said in a statement.
Nationally, the unemployment rate was 5 percent for March.
"The state's economy is currently very strong and is likely to continue to be strong through the end of this year and into next," said Mark Zandi, chief economist for Regional Financial Associates in West Chester, Pa.
The state said the Maryland labor force and state employment levels rose in March. Employment rose by 20,000, reaching 2.64 million, a record high for March. This expansion helped absorb the seasonal job-hunters who typically enter the market now, slashing the number of unemployed people by more than 18,000.
The biggest gains came in the services sector, including agricultural, business and hotel services. Retail trade -- which includes such things as building-materials, garden-supply stores and restaurants -- also enjoyed strong gains.
The goods-production sector, which includes high-tech and low-tech manufacturing, showed more moderate gains, according to state spokeswoman Karen Napolitano.
Unemployment rates were lower in all of the state's 24 jurisdictions for the month.
These low levels of unemployment are causing a tight labor market -- which means higher wages, Zandi said. Eventually, that could be inflationary and could also cause economic growth to slow, he said.
"As unemployment continues to move lower, you're going to see job growth slow as businesses have difficulties finding bodies," he said.
Pub Date: 5/02/98