Jobs jump stokes hopes for recovery

July 10, 1994|By John E. Woodruff | John E. Woodruff,Sun Staff Writer

The number of Marylanders with jobs has set monthly records for nine straight months, jumping by 13,000 since the pre-recession peak, a sign that the state's slow-starting recovery is at last beginning to feed on itself.

Economists and state officials say the continuing expansion confirms mounting evidence that the state is launched on a gradual but sustainable recovery. But they caution that growth here remains modest and continues to lag behind the national economy.

"The evidence is that, for the last eight or nine months, we've been in a period of normal growth. I don't think Maryland's recovery is fragile -- I think it's sustainable -- but I don't think it's going to be overwhelming, either," said Michael A. Conte, director of regional economic studies at the University of Baltimore.

But not everyone who studies Maryland's economy is certain how sustainable the recovery is.

"The key to Maryland's recovery will be personal incomes, which enable consumers to spend, and corporate earnings, which enable companies to invest, and both of those are growing but growing very slowly. In my view, consumers in particular are severely strained, and that leads me to be concerned about the sustainability of this recovery," said Charles McMillion, president Washington-based MBG Information Services, a consulting firm that tracks the state's economy.

"The distinction between this expansion and the last two is that this one is much more shallow, and the least backsliding could cost us ourmomentum," said Patrick Arnold, director of labor market analysis for the state Department of Economic and Employment Development.

The employment figures are based on a monthly survey of Maryland households and include all people who reported having any kind of job, including part-time or temporary work as well as those working both inside and outside the state, including Washington, D.C., a vital employment center for many Marylanders.

Economists caution that a separate monthly survey of Maryland employers, which studies how many workers they have, remains well below its pre-recession peaks, one of many indicators that show that even as it recovers, Maryland is still well behind the nation.

Beginning in December 1982, the state experienced 97 consecutive months -- until January 1991 -- in which a record number of Marylanders had jobs.

"Maryland had a really long and strong run through the 1980s," but while it is now beginning to string together another run, the early signs are that it will not be as strong this time and therefore may not be as long, Mr. Arnold said.

The 1980s were some of the best years the state has known in this century, powered not only by the national economic expansion but also by the booming defense budgets of the Reagan years.

But the recession of the 1990s also hit harder here than in the rest of the country, deepened by the contraction of defense spending after the end of the Cold War.

As the recession took hold and unemployment began to bite, evenwith a slowly rising population, the state ceased to set monthly employment records after January 1991 and did not see another record until the next October. Then, even amid recession, it weakly but steadily put together a string of 19 monthly records, broken in May 1993.

The current string began last September.

The state had a seasonally adjusted total of 2,495,964 employed residents at its pre-recession peak in March 1990, but 45,887 fewer jobs by January 1991.

As of May, the last month for which figures are available, the

state had 2,509,512 employed residents -- 13,548 more than the pre-recession peak.

"Defense spending is not going to go to zero and seems to be stabilizing, and there has been some initial demand for office space, so defense and commercial construction -- the two sectors that have been holding Maryland back -- now seem to be at or near their bottoms just as other sectors are recovering. So I think things are coming together to keep this recovery alive," the University of Baltimore's Mr. Conte said.

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