Md. unemployment falls to 4.4 percent Aug. figure lowest recorded in the state in seven years

'Doesn't come as a surprise'

Job growth continues strong over eight straight quarters

The economy

October 04, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

In another sign that Maryland has hitched itself more securely to the country's economic train, the state's unemployment rate slipped to 4.4 percent in August, its lowest seasonally adjusted point in seven years.

The proportion of Marylanders without jobs in August fell from 4.7 percent in July and from 4.8 percent in August 1996, according to the U.S. Labor Department. The state's highest unemployment rate in the last decade was 6.8 percent, logged )) for five straight months in 1992.

"Job growth has been very strong in Maryland over the last eight quarters," said Mike Funk, an economist who follows the state for the Regional Economic Studies Institute at Towson University. "It doesn't come as a surprise that we would hit a seven-year low."

Maryland, which has been adding jobs at a 1.8 percent annual rate recently, isn't Nevada, which has been layering on jobs at 5 percent a year. It isn't even Virginia, whose Washington suburbs are booking yearly employment growth of 3.6 percent and luring working Marylanders across the Potomac.

"A lot of people are commuting to jobs in Northern Virginia," said Mark Vitner, an economist with First Union Corp. in Charlotte, N.C. "The unemployment rate portrays a better picture of Maryland's economy than the job-growth figures do."

Even so, the latest figures ought to cheer a state that sprang slow from the starting block of the last recession and sputtered through much of this decade, economists said.

"It's a function of a half-dozen years of job growth expansion," said Mark Zandi, economist with Regional Financial Associates in West Chester, Pa. "The Maryland economy took a little longer to get going, but now it's participating fully in the expansion."

Officially, Maryland is growing state-based employment at a rate of about 40,000 jobs a year, or 1.8 percent. "We think it's much more like 2.1 percent -- very much in line with the rate of growth for the national economy," Funk said.

The Labor Department often misses new jobs on first scan, leading to upward revisions later in officially reported job growth, he said.

In either case, recent economic performance is a huge improvement on Maryland's 0.6 percent average annual growth for the 1990-1996 period.

What's more, many of Maryland's new jobs pay well.

Healthy sectors include business services, computers, engineering, accounting, research and testing, communications and construction, economists said.

"We're getting fairly good job growth in some of the new industries," Vitner said. "The nonbank financial service sector is doing real well. At the same time, some of the drags on the economy -- the manufacturing industry, the shipping and transportation industry -- have let up."

At 4.4 percent, Maryland's August jobless rate was half a percentage point lower than the 4.9 percent experienced by the nation as a whole that month.

The state's slimmest jobless rate of the last 10 years was achieved in the summer of 1989, when 3.6 percent of the labor force was without jobs.

"It's good times all over, from Boston to Baltimore to the Bay Area of California," Zandi said. "Everyone is enjoying low unemployment, and in many parts of the country we're at record low unemployment. Maryland is at a seven-year low, but I could probably point to 100 metropolitan areas across the country that are at record lows."

Maryland had 121,000 unemployed people in August, down from 132,000 in July.

As available workers dwindle, economists say, pressure will grow on the state's and the country's ability to keep adding jobs.

Employers in many different kinds of businesses have reported this year that they've had problems finding enough qualified workers, and some are having to raise wages to hire.

In Howard County, for example, with an unemployment rate of 2.8 percent, fast-food restaurants are starting workers at $7.50 an hour.

Across Maryland, Garrett County had the highest unemployment rate for August, at 10.5 percent. Montgomery County had the lowest, at 2.1 percent.

L The jobless rate for metropolitan Baltimore was 5.0 percent.

For Baltimore City, it was 8.2 percent.

Pub Date: 10/04/97

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