Md. jobless rate fell to 4.3% in Jan.

Experts say state skirted hard-hitting recession

March 11, 2004|By Paul Adams | Paul Adams,SUN STAFF

Maryland's unemployment rate fell in January to 4.3 percent from 4.6 percent in the previous month, suggesting the state's economy is gradually beginning to produce more jobs after months of sluggish growth.

The number of people without jobs fell by about 7,700 from December even as the civilian labor force grew to 2.95 million from 2.91 million during the month, according to federal Labor Department figures released yesterday. The unemployment rate for January was adjusted for seasonal differences and is equal to the rate recorded a year ago.

Economists say the numbers suggest that Maryland largely escaped the recession that cast so many workers onto the unemployment rolls in the past few years. The state's unemployment rate continues to be well below the national rate, which was 5.6 percent in January.

FOR THE RECORD - An article in yesterday's Business section incorrectly reported the state's non-seasonally adjusted unemployment rate for January. The correct rate is 4.7 percent. The non-seasonally adjusted rates for two counties were also incorrect. The correct rate for Montgomery County was 2.6 percent, and the rate for Worcester County was 15.9 percent. The Sun regrets the error.

"As an overall state economy, we continue to really have dodged this bullet," said Richard P. Clinch, a University of Baltimore economist.

That's in stark contrast to the 1990-1991 recession, when Maryland was hit disproportionately by cuts in government spending on defense and services. The opposite is true today, thanks to deficit spending, economists said.

"When you issue [federal] debt to spend money on defense, Maryland does really well," Clinch said. "When you issue debt to pay for government services, Maryland does even better."

Anirban Basu, an economist for Baltimore consulting firm Optimal Solutions Group, agreed, saying Maryland's diverse economy has helped it outperform most of the rest of the nation. He pointed out that the state's unemployment rate is only 1 percentage point higher today than the all-time low of 3.5 percent reached in 2000.

"By historical standards, Maryland's unemployment rate remains quite low," he said.

In a separate report, the Maryland Department of Labor, Licensing and Regulation reported that the non-seasonally adjusted unemployment rate increased to 6.3 percent in January from 5.4 percent a month earlier as a result of colder weather and customary post-holiday reductions in staffing among some businesses. Only Prince George's County remained stable at 4.5 percent.

As is typical for January, payrolls dropped among general merchandise and department stores, as well as in the hospitality industry. Construction activity dipped as a result of colder weather after the holidays.

The state labor department said Montgomery County's non-seasonally adjusted rate of 2.7 percent was the lowest in the state. Worcester County had the highest, with 15.3 percent. And Baltimore City continued to struggle with a rate of 8.9 percent, up from 8.6 percent in January of last year.

However, staffing agencies in the city and region say they are seeing higher demand for workers.

"It feels to me like there's a lot of hiring going on and that demand is starting to exceed supply up to a certain [salary] level," said Mitch Halbrich, managing director for Spherion Professional Recruiting in Baltimore.

The company places workers in accounting, finance, banking, information technology, marketing and other job categories. A year ago, Halbrich said, businesses were focused on cutting costs. That is slowly changing as corporate earnings rebound.

"Companies can start spending money again on things like systems upgrades - the types of things that create a need for people," he said.

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