Md. job gain is tops in nation

11,800 are added in July, best increase since 1997

Federal spending partly credited

But jobless rate rises to 4.1% from 3.9% in June

August 26, 2004|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Maryland's economic outlook is brightening, new employment statistics indicate.

Based on federal statistics, Maryland added more nonfarm jobs last month than any state in the nation, state officials said. It was the state's best July increase in seven years.

An increase in the number of unemployed workers in July also is viewed by economists as an optimistic sign, suggesting that people who had earlier abandoned job searches were getting back into the market.

Maryland added 11,800 non-farm jobs last month, largely because of its tourism industry, heavy federal spending and strong defense industry. The gain could send a message to corporate America that the state has the kind of economy that fosters growth, economists and government officials said.

"It throws Maryland's strengthening economy, the strong recovery, into the spotlight," said John Hopkins, associate director of applied economics at RESI, the research and consulting arm of Towson University. "As far as business perception, I think this is a big deal and will make Maryland more of a favorable business relocation target."

The unemployment rate in the state rose to 4.1 percent in July from 3.9 percent in June, state officials reported. The number was below the nation's 5.5 percent unemployment rate for July. The federal and state figures were seasonally adjusted.

In areas across Maryland, the numbers were varied: Unemployment held steady at 8.7 percent in Baltimore City, the worst in the state, and fell as low as 2.7 percent in Howard and Montgomery counties.

There were about 2.83 million employed workers in Maryland in July - nearly 2,000 more than there were in June. But about 121,000 Maryland residents were unemployed and looking for work last month, approximately 5,000 more than were unemployed in June.

Economists interpreted that as good news, with more workers optimistic about finding work and rejoining the labor force.

"The data looks like what happened in July was that more jobs were created, but a whole bunch of previously discouraged workers entered the work force and that pushed up the unemployment rate," said Scott Hoyt, a senior economist and Maryland analyst for in West Chester, Pa.

Renee Whalen, regional vice president in the Baltimore-Washington area for Robert Half International, a professional staffing service, said her firm is getting more requests from clients looking for job candidates. Sectors that are picking up include real estate property management, staffing for hospital and medical facilities, manufacturing and financial services, she said.

Companies are hiring workers out of their temporary jobs and into permanent status faster than they were last year, and job candidates are more optimistic than they used to be, Whalen said.

"I think candidates are feeling it," Whalen said. "They're getting more offers, they're getting more phone calls for jobs."

But Maryland's growth is compounded by recent disheartening developments from the private sector, said Anirban Basu, chief executive officer of Sage Policy Group, an economic and policy consulting firm in Baltimore.

The Rouse Co., the development company that owns many of the area's malls and built Columbia in Howard County, announced last week that it had been sold. Also, Novavax Inc., one of Maryland's few biotech companies that has products on the market, said this month that it is moving its corporate headquarters from Columbia to the Philadelphia suburbs.

"So it is not to say that everything is fine and rosy," Basu said.

Basu and other economists also warned that July employment figures are likely to be adjusted in the coming months.

In the summer, teachers are leaving the labor force, local governments hire to fill positions in parks and other places and there's more seasonal work such as waiting tables and restaurants at the Inner Harbor or at the beach.

Because of that, Basu and other economists said, the state's addition of 11,800 jobs may be less than solid. "I would love to jump up and down and do cartwheels when I hear such a number, but I cannot," Basu said, "and the reason is economists generally take July job numbers with a grain of salt."

The last time Maryland saw such a large July job surge was in July 1997 when 13,800 jobs were created, according to the state Department of Labor, Licensing and Regulation. So far this year, the state has added 52,300 jobs.

The department's deputy secretary, John M. Wasilisin, said Maryland officials are most proud of the state's steady job increase since the beginning of the year.

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