Jobless rate steady in Md.

Figure unchanged at 4%

economists disappointed with state's job creation

November 22, 2006|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

Maryland's unemployment rate remained steady at a low 4 percent last month, but the pace of job creation continues to be slower than economists expected.

Employers added 29,900 jobs during the 12 months that ended in October, according to U.S. Labor Department numbers released yesterday. In October last year, by comparison, the year-over-year gains topped 40,000 jobs.

Several local economists had predicted better job creation this year than in 2005, which seems unlikely now.

Charles W. McMillion, president and chief economist of MBG Information Services in Washington, blames the drag of the housing market slump. When people aren't buying as many homes, there's less need for real estate agents, lenders, home-furnishing sales clerks and a variety of other positions that might not immediately appear linked to real estate.

"The Maryland economy seems to have hit a plateau," McMillion said. "It's doing OK, but it's certainly slowing."

Richard P. Clinch, director of economic research at the Jacob France Institute, the University of Baltimore's economic research center, thinks there's a second underlying problem: Some employers aren't creating jobs because there's seemingly no one to hire. The share of adults with jobs is high, and the unemployment rate remains low.

"People can't find the workers that they need," Clinch said. He doesn't think the disappointing job-creation number is a sign of trouble: "Maryland's economy is doing just fine, and the prospects are fundamentally good."

Part of the problem in figuring out whether October was a good or bad month stems from the Labor Department's data. The department's seasonally adjusted numbers - which attempt to smooth the normal dips and gains, such as retailers ramping up for the holiday rush - show a loss of 1,300 jobs over the month. Because October is generally a time of hiring, not firing, such a number would suggest the monthly gain was not as strong as expected based on past performance. But the actual number was an 8,500-job gain. And that's better, not worse, than the average October performance in the previous 10 years.

It was enough for Clinch to declare that the apparent job loss "has probably got more to do with math than reality."

For the job seekers that Goodwill Industries of the Chesapeake helps, reality is pretty good. At entry level and just above, demand is strong for workers in retail, transportation, warehousing and health care, said Phil Holmes, vice president for public policy and program development at the Baltimore-based group.

Disheartened residents who had dropped out of the labor market entirely - they weren't even counted as unemployed because they weren't looking - are getting jobs again.

"We're encouraged," he said.

The downside is that construction companies aren't hiring as many workers.

But in the city, where a variety of office and commercial projects are under way, the reason appears to be cold weather rather than the housing market, Holmes said.

Statewide, education and health services employers added the most jobs in the 12-month period - 9,900.

Professional and business services gained 6,600 jobs while leisure and hospitality added 6,100, according to the Labor Department. All are traditionally strong sectors in Maryland.

Manufacturing, the perennially contracting sector, shed 2,500 jobs. Information employers cut 800 jobs.

Local employment statistics released separately by the state showed that the Baltimore region's jobless rate was 3.9 percent last month, slightly better than in September. (Unlike the state rate, the local numbers are not adjusted for seasonal variations.)

Both the state's extremes were in the region: Howard County recorded the lowest jobless rate, at 2.6 percent, while Baltimore - at 6.3 percent - had the highest. But the city saw significant improvement from Septem- ber, when the rate was 6.6 per- cent.

jamie.smith.hopkins@baltsun.com

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