Md. jobless rate worse in August than U.S. average Unemployment hits 6.8 percent, but is a rebound near?

October 09, 1993|By Kim Clark | Kim Clark,Staff Writer

Maryland's unemployment rate rose above the national average in August -- the first time that's happened in at least a decade, the U.S. Department of Labor reported yesterday.

After seasonal adjustments, Maryland's unemployment rate increased a tenth of a percentage point, to 6.8 percent, in August, while the national average fell a tenth of a percentage point, to 6.7 percent, in the same period.

Compounding the bad news, Kemper Securities reported yesterday that Maryland's economy ranked 48th of the 50 states and District of Columbia in its national analysis for the second quarter.

Maryland has ranked near the bottom since late 1991, when the Chicago bond-rating company began reporting its analyses.

Employment, mortgage delinquencies and other statistics indicate "the state is clearly in the doldrums and hasn't shown any significant signs of improving," said Richard Ciccarone, Kemper Securities' director of research.

While state officials said yesterday's news would soon be erased by improvements, several private economists and business ZTC people said the reports were the culmination of a long and troubling trend.

During the boom years of the 1980s, Maryland's economy soared. And even in the beginning of the recession, Maryland's job picture remained better than the national average.

But as the rest of the nation started rebounding last year, Maryland's job base continued eroding. Maryland lost nearly 80,000 jobs between last summer and this summer, the second-worst job loss in the nation.

Mahlon Straszheim, the University of Maryland economist who advises the governor, says the state's troubles are ending -- and soon.

Filings for unemployment insurance have steadily declined, and other indicators such as income tax withholding have improved, indicating businesses are doing better and are hiring, he said.

"I think it is not as bad as it appears," Dr. Straszheim said, noting that while big corporate layoffs make headlines "you don't hear about the growth of small firms."

"Maryland's unemployment rate will be below the national average in the future," he said, adding he expects to see improvements later this fall.

But Andrew Moody, regional economist for the WEFA Group, an economic forecasting company in Bala Cynwyd, Pa., disputed that view. After a glorious decade, Maryland's economic party is over, Mr. Moody said.

Big drops in defense and construction spending, which buoyed the economy during the 1980s, have knocked the wind out of the state's sails, he said.

And the continuing layoffs announced by major employers such as Martin Marietta Corp., USAir Group and Procter & Gamble Co. indicate the state's economy has changed permanently for the worse, he said.

"Now, you are going to be average," he said. But, he added, "Someone has got to be average."

And some local business people say that economic normality would be an improvement over what the state has seen recently.

Charles E. Boyd, director of forecasting for Baltimore Gas and Electric Co., said yesterday that he wasn't surprised by the unemployment rate. "We've been doing worse than the U.S. all along," he said.

"What scares me the most is that there still seems to be lot of restructuring and 'rightsizing' going on," Mr. Boyd said.

The utility expects the regional economy to be essentially stagnant through next year, and that is one of the reasons that has led BG&E itself to start cutting staff, he said.

"It is hard to see the light at the end of the tunnel," he said.

The August figures were the first time since 1983, when the Bureau of Labor Statistics began compiling seasonally adjusted monthly state unemployment rates, that Maryland's unemployment rate exceeded the national rate.

On an unadjusted basis, Maryland's unemployment rate rose a tenth of a percentage point, to 6.7 percent, compared with 6.5 percent for the nation.

That was the first time since November 1981 that the state's unadjusted rate was higher than the nation's.

According to the figures, the state suffered a decline in &r employment from July to August in most counties and Baltimore City.

Baltimore City, for example, lost 1,114 jobs in August as the unemployment rate rose a half a percentage point, to 11.5 percent.

The state said employment normally drops in August as summer jobs end, and the unemployment rates in several vacation areas, such as the Eastern Shore, improved.

Kent County, for example, saw its unemployment rate drop more than 3 percentage points, to 7.1 percent.

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