Job growth slows in Md.

Despite downturn, state's unemployment rate stays at low 3.6%

May 19, 2007|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

Maryland job growth was nearly flat in April as employers added just 600 jobs, but the state unemployment rate remained at a low 3.6 percent, according to Labor Department numbers released yesterday.

The numbers are preliminary and adjusted for seasonal variations.

Job creation has been consistently slower than it was a year or so ago. Employers added 26,400 jobs in the past 12 months, according to numbers that are not adjusted for seasonal variations because they are annual. A year earlier, the 12-month total was about 37,000 jobs. A year before that, the pace of growth topped 40,000.

Despite the slowdown in new jobs, the jobless rate - at 3.6 percent for the second consecutive month - is the lowest since the last economic boom ended in early 2001. The nation's jobless rate last month, by comparison, was 4.5 percent.

Some economists blame the state's fairly tepid job growth on the housing market, because a sharp drop in sales can ripple through many sectors of the economy, from construction to retail.

Others note that a variety of businesses are complaining of worker shortages, which would explain both the low jobless rate and low job growth. Jobs only count in the official data if they are filled.

"The reason job growth numbers are low is because we have no people," said Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute. "We haven't had the wage growth to generate more people entering the work force, we have housing restrictions that make it harder to move into Maryland, and we have transportation barriers."

By transportation barriers, he means an insufficient regional transit system. Unemployed workers in Baltimore and Prince George's County who don't have cars find it difficult, and sometimes impossible, to get to job-rich suburbs, he said. Suburban businesses, in turn, suffer from job openings they can't fill.

Unemployment was 5.7 percent in Baltimore but 2.5 percent in Howard County in March, the most recent month for which data for local jurisdictions is available.

Jason Hardebeck, executive director of the Baltimore-based Maryland Business Council, said a shortage of qualified candidates is the top issue for the group's members, and has been for several years. "When you really get into the nuts and bolts of their businesses and what's holding them back, it's finding workers," he said.

State Labor Secretary Thomas E. Perez wants to improve work-force development efforts to fill shortages in health care, hospitality, biotech and other sectors.

"We have many critical sectors, both high-tech and low-tech, that have significant work-force needs today, and will have even greater needs tomorrow," he said.

Still, some sectors with slowing growth could be feeling the effects of the housing slump.

Construction, for instance, produced 2,500 jobs in the past 12 months, about a third of the growth it had a year earlier. Clinch, who had expected a construction bust and is surprised the numbers aren't negative, believes it would be worse if commercial construction weren't buoying the numbers.

Trade, transportation and utilities added 200 jobs over the past 12 months, compared with 5,500 a year earlier. A drop in retail job growth was partly to blame.

The financial sector added even fewer jobs - 100 - as the "credit intermediation" industry, which includes mortgage brokers, shed employment.

But two of Maryland's key employment sectors picked up the pace. Professional and business services employers added 8,200 jobs over the past 12 months, while leisure and hospitality employers created 6,700 jobs - in both cases, more than they did a year earlier. Education and health services added 7,200 jobs, a bit less than they did a year ago.

Manufacturing, which has shed jobs for years in Maryland, was down 2,300 positions in the past 12 months. That's not as bad as the 12-month loss of 4,400 jobs in April of last year.

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