Md. jobless rate improves

Number falls to 3.9% in November as 5,600 new jobs are created

December 23, 2006|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

Maryland's unemployment rate fell below 4 percent last month for the first time in a half-year as employers picked up the pace of job creation, the federal government said yesterday.

The number of jobs in the state rose by 5,600 last month, according to preliminary Labor Department numbers adjusted for seasonal variations. That's an improvement over the previous month, when the government recorded a small decline in jobs, and it is also the second-largest increase so far this year.

The jobless rate improved to 3.9 percent from October's 4 percent.

"I think it says the state's economy is in really good shape," said Kevin McIntyre, an associate professor of economics at McDaniel College in Westminster. "With such a tight labor market here, that will keep wage and income growth robust."

Still, recent job growth hasn't been as strong as economists had predicted it would be. Maryland employers added 32,600 jobs over the past 12 months, less than the 40,600-job increase between November 2004 and November 2005. The annual numbers are not seasonally adjusted.

Several experts have attributed the slowdown to the reversal in the housing market from boom to slump. With fewer people buying homes, there's less work for real estate agents, loan officers, retailers selling home furnishings and the like.

Home sales in Maryland have been declining for months, down nearly 20 percent in November compared with the same period last year.

Charles W. McMillion, president and chief economist of MBG Information Services in Washington, said Maryland's job growth is "reasonable" but is likely headed for further slowing thanks to the housing market - a nationwide issue, not just a state problem.

He thinks the country has a 60 percent chance of slipping into recession in the first half of next year.

"So I think we can expect either a recession or something very close to a recession in Maryland this next year," McMillion added.

As things stand now, the state's job market measures up well against the nation's.

The pace of job growth in the past 12 months was the same - and in Maryland, a larger share of adults are already working. The U.S. unemployment rate was 4.5 percent last month.

With fewer unemployed adults available here, local employers are harder pressed to create new jobs, McIntyre noted.

Much more optimistic about the immediate future than McMillion, he thinks the state economy is heading toward a good year.

"The main drag is going to be finding live bodies to fill the jobs," McIntyre said.

That's what companies are telling Renee P. Whalen, Baltimore-Washington regional vice president for Robert Half International Inc., a staffing firm that focuses on white-collar fields such as accounting and information technology.

Demand for Half's services is high because companies are having a hard time finding workers on their own, she said.

Requests aren't even slowing down now, which is what usually happens at the end of the year because companies would rather put off hiring decisions until after the holidays.

"Their sense of urgency is up," Whalen said. "Seriously, I've got so much work to do right now."

The education and health services sector was the biggest job creator in the past 12 months, adding 9,900 positions. Professional and business services followed, with 7,700 jobs. Leisure and hospitality added 6,400 jobs. All are typically strong sectors for the state.

Manufacturing, on the other hand, contracted by 3,100 positions. Though the losses are part of a national trend, it's more pronounced here, where the industry has taken a beating for years.

"Manufacturing is in recession, especially in Maryland," McMillion said.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.