Maryland's unemployment rate improved to an unusually low 3.6 percent as employers added 4,500 jobs last month, the federal government said yesterday.
The strong showing came after a slowdown in recent months caused in part by the drag of plummeting home sales. The rippling effect of the housing boom's end has hit such varied businesses as banks and power-tool maker Black & Decker Corp.
Despite the positive monthly numbers, which are preliminary and adjusted for seasonal variations, Maryland's job growth over the past year is now far below average. Employers created just 19,800 jobs since March 2006 - about a third of the growth during the dot-com boom of the late 1990s, according to the Labor Department. Annual statistics are not seasonally adjusted.
The speed of local job growth in the past 12 months was also about half as fast as the nation's, with job-creation slowing across most sectors, the government said.
It's a conundrum for economists: Which to believe, the unemployment rate or the annual job performance?
"To a certain extent, these are two diametrically opposed views of the Maryland economy," said Anirban Basu, chief executive of Baltimore-based Sage Policy Group Inc., an economic and policy consulting firm.
"The unemployment rate data tell us that Maryland's economy is performing brilliantly and quickly sucking up any available labor force. Alternatively, the job numbers tell us that Maryland's economy has slowed dramatically in the last 12 months," Basu said.
In March of last year, annual job creation totaled about 53,000.
Basu, who sees signs of growth everywhere, suspects that recent job numbers are artificially low. Employers are having trouble filling positions, he noted. This adds credence to government labor force numbers suggesting that last month was the first time the unemployment rate dropped to 3.6 percent since the beginning of 2001, right before economic boom turned to national recession. The rate was 3.8 percent in February.
Plenty to choose
In Baltimore, residents looking for entry-level or just-above-entry-level jobs have plenty to choose from, said Karen L. Sitnick, director of the Mayor's Office of Employment Development in the city.
"I'm not feeling that pinch, I'm not feeling that 'gee, the jobs aren't out there,'" she said.
What she's seeing instead are a greater number of clients needing extra help to get qualified for work. That reminds her of the boom times of the late 1990s and 2000, when residents without severe challenges were likely to bypass the city's one-stop career centers because they had no trouble finding jobs on their own.
"For us, the challenge is enabling more people to get what they need to get into the job market," Sitnick said.
Both Basu and economist Daraius Irani note one reason besides bad data for an improving unemployment rate at a time of sharply slowing job growth: Employers can't create jobs if they can't find people to fill them. But Irani thinks job creation has also slowed because of the housing market.
"We'll probably have continuing lackluster job growth going forward in Maryland ... until the housing market corrects itself to the degree that it can," said Irani, director of applied economics at RESI, Towson University's research and consulting arm.
Labor Department numbers suggest that job growth is slowing or even turning negative in many sectors.
Construction, an industry keenly affected by the housing slowdown, added 1,000 jobs in Maryland in the past 12 months, about 1/10 the number that were added in the previous year. Retailers, who were adding positions this time last year, cut 800 jobs in the past 12 months. The information and financial activities sectors both went from adding to subtracting as well.
Key sectors slowing
Even Maryland's two key sectors saw significantly slowing job growth. Professional and business services employers added 6,200 jobs in the past 12 months while education and health services employers added 6,400 jobs, but both created several thousand more jobs a year earlier.
Leisure and hospitality managed a slightly better annual performance, adding 5,600 jobs through last month. And though manufacturing continued to shed jobs, it at least did so more slowly, dropping by 2,500 versus the more than 4,000 lost in the 12 months ending in March of last year.