State jobless rate holds steady December figure stays near low for '90s

other surveys differ in views

February 07, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

Maryland's unemployment rate stayed near its lowest level of the decade last month, but two other economic measures continued to yield sharply varying readings on the state's job growth, new government figures show.

The numbers are contradictory and subject to revision, but several analysts agreed that overall they point to continued improvement and possible acceleration in Maryland's economy.

"I would suggest that people are finding jobs," said Mark Vitner, an economist who follows Maryland for First Union Corp., a Charlotte, N.C.-based banking company. "All of the anecdotal evidence that we get, the businesses that we talk to, all suggest that the economy has been growing" at a decent clip, he said.

December unemployment for Maryland was 4.4 percent, the same as November's rate, after adjustments for seasonal variations, according to Labor Department figures that won't be formally released until today but which were available on the Internet. The unadjusted unemployment rate fell from 4.4 percent in November to 4.1 percent last month, as retailers hired extra help for Christmas.

The last time 4.1 percent or less of Maryland's work force was unemployed was in April 1990, when the unadjusted unemployment rate was 3.8 percent and the state and country were coasting toward a recession. The last time the adjusted rate was 4.4 percent was in May 1990.

But unemployment is only one facet of an economy; if idled workers move elsewhere, local unemployment can fall even if growth lags.

And just how quickly Maryland is growing new jobs depends on whom you ask: employers or workers.

The government asks both. Data based on a household survey of workers and would-be workers shows heroic job growth starting last May, although seasonally adjusted employment dipped slightly in December.

The household survey showed 2.68 million Marylanders were working at the end of 1996, a strong 95,000 more than had jobs at the year's start. That's 3.7 percent growth. Employment expansion for 1995, by contrast, was less than 2,000, the survey said.

But when jobs are counted by checking with Maryland's companies, government agencies and other employers, the growth is far less eye-popping.

The employer survey showed 2.19 million Maryland-based jobs in December, according to the data available yesterday. That's only 10,000 more -- 0.5 percent -- than were counted at the end of 1995, not 95,000.

Part of the difference may be explained by commuting patterns. Thousands of people live in Maryland and work elsewhere, and it's possible that Marylanders are getting hired in Washington and Virginia faster than this state itself is adding jobs, said Patrick Arnold, Maryland's director of labor market analysis.

Self-employed people might also skew the results. They show up as working in the household survey, but aren't counted in the employer survey. But commuting and self-employment don't account for all the divergence in the household and employer results, Arnold said. The rest is a mystery. "We can explain a good deal of it, but not all of it," he said.

Many economists believe that economic reality for Maryland lies between the two surveys. But precisely where continues to be a matter for argument.

Economist Charles McMillion places much more faith in the employer survey showing very slow growth. The household survey is typically volatile, he said.

Last year's household results mean that "either Maryland has had the most astonishing, skyrocketing growth on record, or there's something wrong with the series" of data, said McMillion, chief economist for MBG Information Services, a Washington forecasting and consulting firm.

He said sluggish retail sales, slow income growth and other statistics reinforce the notion of slow growth.

Michael Funk, a research economist at Towson State University, agreed that the household survey "has been kind of erratic. It's really difficult to get a read on."

But Funk and Vitner both believe that the employer survey understates job growth. It misses not only the self-employed, they said, but also small start-up companies that aren't yet listed in the Labor Department's data banks.

The two men look forward to a revision due this spring, when the employment-based figures will be updated using definitive unemployment insurance records.

"I think that when we get the revisions we're going to see that [in-state] job growth has been a good bit stronger in Maryland," Vitner said.

Pub Date: 2/07/97

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