Md. unemployment rate rose to 4.2% in Feb.

2,000 jobs were added, but labor force increased

state below U.S. average

April 08, 2005|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

Maryland employers added 2,000 jobs in February, but unemployment inched upward as the labor force swelled, the Labor Department said yesterday.

The jobless rate rose to 4.2 percent from 4.1 percent in January, adjusted for the effect of seasonal variations. That remains well below the national unemployment rate of 5.4 percent.

The strongest Maryland industries during the month of February were leisure and hospitality; professional and business services; and trade, transportation and utilities. Construction and government proved the largest cutters, shedding 1,400 and 700 jobs, respectively.

Economists called the employment growth healthy, noting that the state is up by 42,300 jobs compared to the same month last year - an increase of 1.7 percent, a pace that is about the same as the nation's.

The state's economy "is fundamentally strong," said Amanda Wingard-Phillips, an associate economist with Economy.com in West Chester, Pa.

However, some believe job creation may slow a bit this year as companies deal with the effect of rising energy prices and interest rates.

"The business climate has become considerably more uncertain over the last six months, and I believe this ... has actually begun to translate into these employment numbers," said Anirban Basu, chief executive officer of Sage Policy Group, an economic and policy consulting firm in Baltimore.

He's projecting an increase of 40,000 to 50,000 jobs this year, about the same as last year, but added that much depends on those uncertain macroeconomic factors. Ever-higher costs at the gas pump affect consumer spending, he said, which is bad news for retailers - and retailing jobs.

Even so, he's not concerned that the region will slip into a recession because federal security and defense dollars continue to flow to Maryland. And though the construction industry reduced employment in February, it is nearly 5,000 jobs ahead of the same month last year.

"The labor market still will remain tight," Basu said, even if job creation slows.

John Hopkins, associate director for applied economics at RESI, Towson University's research and consulting arm, thinks employers could face an even tougher time: "If the momentum continues, Maryland could find itself in the midst of a labor shortage," he said.

Basu said there are bidding wars now for high-skill employees, but Hopkins doesn't see signs of a general shortage just yet. The last time that average employers were desperate for bodies - during the boom years right before the 2001 recession - Maryland's unemployment rate dropped to 3.3 percent.

About 121,600 residents were searching for work in February but hadn't found it, the Labor Department said. Nearly 2.8 million residents were employed.

Local unemployment numbers, not adjusted for seasonal variations, were also released yesterday by the Maryland Department of Labor, Licensing and Regulation.

The jobless rate in February was 7.4 percent in Baltimore City, down from 8 percent in January; 4.6 percent in Baltimore County, down from 4.7 percent; 3.8 percent in Anne Arundel, the same as the previous month; 4 percent in Carroll, up from 3.6 percent; 4.3 percent in Harford, down from 4.5 percent; and 3.1 percent in Howard, down from 3.2 percent.

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