Maryland's employment market performed relatively well last month at a time of economic instability, bucking the national trend by adding jobs and cutting unemployment.
The jobless rate fell to 3.7 percent, from 4 percent in July, the U.S. Labor Department said yesterday. That's significantly lower than the national rate, which remained at 4.6 percent last month.
Employment grew last month by about 3,300 jobs, according to preliminary estimates adjusted for seasonal variations. Nationally, employers cut 4,000 jobs - the first drop in four years, when the country was still suffering from the effects of the 2001 recession.
The decline in U.S. jobs, though modest, was seen by economists as a sign that the housing market slump and the related turmoil in the mortgage lending industry has rippled outward into the broader economy.
The credit crunch worsened last month as sales of existing homes dropped nearly 13 percent nationally, compared with August 2006, continuing a months-long downward trend.
Anirban Basu, chairman and chief executive of Sage Policy Group Inc., a Baltimore economic and policy consulting firm, suspects that some of Maryland's job creation last month is less actual than statistical. He thinks the state did better in earlier parts of the year than the Labor Department calculated, and those job gains are finally filtering into the numbers.
And Mohammad Iqbal, an economist and analyst at Global Insight Inc., of Waltham, Mass., said some of the improvement in the unemployment rate is probably due to jobless students going back to college and leaving the labor force. The pool of workers and people looking for work fell by 21,000 people last month.
But Basu said the state is doing better than the nation as a whole at the moment. It's being cushioned by its sizable number of federal contractors and health care businesses - which are less affected by general economic trends than most companies - and by a "red hot" commercial construction sector, he said.
"It's a healthy economy," Basu said. "Maryland seems to be somewhat less subject or vulnerable to economic forces than other states. ... But it is also the case that Maryland's economic recoveries have tended to lag the nation's as well."
Over the past year, the state added 31,300 jobs, not adjusted for seasonal variations. That 1.2 percent growth rate is slightly above the nation's.
"It's better than my expectations," Iqbal said.
Manufacturing, as usual, shed jobs in the past 12 months - 2,900 in total. The financial activities sector, which includes mortgage lending, eked out a 100-job gain. Basu expects these two sectors will be the chief drags on employment growth in coming months.
But construction added 4,400 jobs in the past 12 months, with weaknesses among homebuilders outweighed by commercial-building growth. Baltimore in particular has large hotel and office projects under way.
Maryland employers added more construction jobs during the period than they did in the previous 12-month period - though not as many as the 12 months that ended in August 2005, the last hurrah of the housing boom.
"In Baltimore, things look very, very strong," said Mike Henderson, president of the Baltimore metropolitan chapter of Associated Builders and Contractors. He's seeing a lull in commercial construction companies hiring new entrants needing training, but "there's a job if you're already an electrician, already a plumber."
The leisure and hospitality sector added 5,600 jobs. Maryland's mainstays - the education and health services sector and the professional and business services sector - both added nearly 9,000 jobs.
"The numbers of nurses and other licensed professionals in Maryland hospitals has been increasing steadily," said Catherine Crowley, vice president of the Maryland Hospital Association. "We see it as a demographic phenomenon, as population ages and more people are availing themselves of high-technology health care."
Nursing vacancy rates have been rising. In a survey released last month, the association said Maryland hospitals needed more than 2,300 additional nurses to be fully staffed with permanent workers.
The problem isn't lack of interest: It's education.
"The schools are full," Crowley said. "Unfortunately, we have had to turn away some qualified students because we didn't have room for them in the classrooms."