Md. added 9,500 jobs in Sept.

Jobless rate dips to 4%

12-month gain just 24,000

October 21, 2006|By Jamie Smith Hopkins | Jamie Smith Hopkins,sun reporter

Maryland employers added 9,500 jobs last month, a gain that appeared to reflect the return of seasonal school staff to work rather than rapid job creation.

The preliminary numbers, released yesterday by the U.S. Department of Labor, show that almost all the growth was government-related.

Still, unemployment remained low, dropping slightly to 4 percent, compared with 4.1 percent in August. That's significantly better than the 4.6 percent jobless rate nationwide.

And August was a markedly better month than the federal government originally thought, up 4,200 jobs - none from government. All the monthly numbers are adjusted to try to account for seasonal variations.

It's a period of mixed signals for the state, which hit an employment speed bump this year that economists attribute to the sharp slowdown in home sales and residential construction.

For the 12 months that ended Sept. 30, the gain was a weak 24,000 jobs - roughly half what Maryland recorded this time last year and the lowest growth since mid-2004.

The rate of expansion is far below local economists' expectations, let alone the national average. The yearly numbers are not adjusted for seasonal variations.

But a variety of employers continue to report worker shortages. Some are having trouble keeping existing jobs filled, let alone hiring for expansion. And more than half of Maryland companies expect to add jobs next year, according to a University of Baltimore survey released this week.

The unemployment rate is so low in the Baltimore area and other parts of the state that the power has shifted to job seekers, said Quincie Rivers, an area vice president at staffing firm Adecco. She said companies are rethinking wages and work-life issues in an effort to win the attention of a too-small pool of candidates.

"I'm seeing a paradigm shift," Rivers said. "Employees, whether it be temporary, temp-to-hire or direct placement, have more choices."

Daraius Irani, director of applied economics at RESI, Towson University's research and consulting arm, thinks that is part of the reason job growth has been muted in recent months.

A dearth of available workers is pinching businesses in technical fields, he said. RESI, for instance, is seeing far fewer resumes than normal for positions it's trying to fill.

"The number of people applying for these jobs has gone way down, and with the low unemployment rate, it kind of makes sense," Irani said.

Shortages alone can't account for all the slow job growth, though.

The University of Baltimore survey of businesses suggests that the situation has improved for employers, not worsened. Twenty percent of Maryland firms reported labor shortages in the summer, down from 46 percent in summer 2005.

Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute, thinks the housing market slowdown is "coming home to roost." He analyzed employment figures and concluded that more than half of the state's job growth from the end of the national recession in 2001 through 2005 was housing-related.

The sector that includes construction added 700 jobs in the 12 months ending in September - less than a tenth of the 7,300 jobs added in the 12-month period ending the previous September.

"This will be more of a temporary issue in Maryland than a long-term issue because we do have BRAC and government-related job growth that will ... continue to bring people into this state," Clinch said, referring to the "base realignment and closure" decisions that will send thousands of military and contractor jobs to the Baltimore area in the next several years.

Taken at face value, the monthly gain of 9,500 jobs in September was the strongest in a year. But both Clinch and Irani discounted it. The government's efforts to adjust for seasonal variations are supposed to smooth out the usual spikes and dips that come every year, such as the support staff returning to schools in August or September, but the adjustments are also subject to statistical quirks.

"The real comparison is the year-over-year," Irani said.

The weakest sector in Maryland continued to be manufacturing, which lost 2,500 jobs in the 12 months ending in September, part of a seemingly never-ending drain in industrial employment. Trade, transportation and utilities - which includes retailers - lost 1,100 jobs.

Education and health services, always a strong sector for Maryland, added 10,500 jobs in the 12-month period. Professional and business services created 7,200 jobs, as did leisure and hospitality businesses.

jamie.smith.hopkins@baltsun.com

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