State jobless rate increased slightly in Dec.

Maryland's unemployment rate bumped up last month to 4.4 percent from 4.2 percent, but local economists think the news is more hopeful than horrible.

About 8,000 state residents joined the labor force, while the unemployment rolls rose by 7,500 to 128,988 people in December, according to federal Labor Department numbers released yesterday and adjusted for seasonal variations.


"The increase in unemployment was really not about job loss but people coming into the labor market looking for jobs," said Anirban Basu, head of Optimal Solutions Group, a Baltimore economic and policy consulting firm.

Richard P. Clinch, a University of Baltimore economist, added: "It's being driven by people who are optimistic that things are improving, therefore starting their search for work."


A separate, less rosy survey by the Labor Department found that 7,900 jobs were cut in Maryland that month - a loss larger than in all but three states, Michigan, Ohio and California. Both economists think the job loss number is inaccurate because it's based on a payroll survey that undercounts employment at small firms, which are harder to track and more likely to hire in an economic recovery than large companies.

Basu said job creation is slow, but businesses are hiring. "It is primarily among small employers," he added.

Patrick Arnold, director of labor market analysis and information at the state Department of Labor, Licensing and Regulation, said the month was "weak" but seasonal adjustment mathematics clouded the picture. The actual job loss reported that month - with no adjustments - was 2,900.

Maryland's unemployment situation remains better than that of the nation as a whole, which had a jobless rate of 5.7 percent last month. Still, employment in the state has slipped recently as the national picture improved.

Maryland businesses reported 25,400 fewer jobs last month than the nearly 2.5 million in September, according to the payroll survey's seasonally adjusted numbers.

But Mitch Halbrich, managing director in Baltimore at Spherion Professional Recruiting, a national firm, is optimistic about the outlook this year because he has seen a pick-up in hiring since the fourth quarter.

"We are struggling for candidates," said Halbrich, whose firm specializes in recruiting financial services professionals, such as accountants, bankers and sales and marketing specialists. "We are really putting a focus on recruiting candidates because hiring demands have increased."

He said that every company he talked with last quarter said they were putting money in their budgets for systems upgrades and personnel.


"It was the first time in three years that we heard anybody putting any money in their budget," he said. "Prior to that it was all about expense control."

Renee Whalen, regional vice president in the Baltimore-Washington area for Robert Half International, a staffing agency, said: "We have been busier all around. We have seen a huge uptick in requests for temporary work or temporary help with the eventuality of going permanent.

"If we find a good staff accountant we can find them a job. If we find a good internal auditor we can find them a job pretty quickly."