State's jobless rate jumps

15-year high is set amid slowdown

January 28, 2009|By Lorraine Mirabella | Lorraine Mirabella,lorraine.mirabella@baltsun.com

Maryland's unemployment rate spiked to a 15-year high in December as the economy continued to falter, causing the state to lose jobs during a 12-month period for the first time since 2003.

The jobless rate jumped to 5.8 percent last month, according to preliminary statistics released yesterday by the U.S. Labor Department. Maryland ended the year with 15,000 fewer jobs than in December 2007, the largest year-over-year loss since September 1992 and the first in five years, according to the Bureau of Labor Statistics.

Maryland had managed to add jobs each month for most of the year, until September, when credit and financial markets collapsed and employers began trimming staffs with more urgency. The state's jobless rate has been rising steadily since May after remaining below 4 percent for more than two years.

Unemployment in Maryland last reached 5.8 percent in October 1993, on a seasonally adjusted basis, the bureau reported. Maryland lost 9,800 jobs last month, compared with November's employment rolls. About 2.6 million people were employed in Maryland last month.

Employers slashed jobs in construction, manufacturing, professional services, financial services, leisure and hospitality. The jobless rate increased from 5.3 percent in November and from 3.6 percent this time last year.

Maryland's employment picture reflects national economic turmoil that began in the manufacturing and housing industries and moved into finance, quickly spreading across the nation and seeping into just about every segment of the economy.

"It's a full-fledged, general economic slowdown, and it's hitting across all sectors," said Joel Naroff, president of Naroff Economic Advisors, an economic consulting firm in Holland, Pa. "That's what makes it so difficult to deal with at this point."

Every state and the District of Columbia saw unemployment jump, compared with the month and the year earlier, the government reported. The nation's unemployment rate rose to 7.2 percent last month. The hardest-hit states were Michigan, with 10.6 percent unemployment; Rhode Island, 10 percent; and South Carolina, 9.5 percent. Forty-nine states lost jobs in December.

"It shows that this job slowdown is really all over the country, not just in the manufacturing centers and not just in the areas overbuilt with houses," said Charles W. McMillion, president and chief economist of Washington-based MBG Information Services.

Unemployment is expected to rise for at least several more months, economists predict.

"There's nothing out there that would tell us that the economy is stabilizing or conditions are getting better," Naroff said.

The government's report of state employment came on the heels of a large batch of layoffs announced Monday by major U.S. employers planning to cut nearly 60,000 jobs across industries.

In January alone, the state has received notifications from several private employers about pending layoffs and closures affecting more than 600 employees, mostly starting in March.

They include Trifinity Partners Baltimore LLC, a manufacturer of car fragrance products, which is closing its South Baltimore plant on March 9 and relocating to Waukegan, Ill., its principal and CEO Jim Merlo said yesterday.

The move will affect 111 workers, who have been offered positions at the new plant, Merlo said. Employees who do not relocate will receive severance and outplacement services, he said.

The company, under different names and several owners, has been making automotive air fragrances in Baltimore for more than 25 years. Merlo bought the business from Shell Lubricants in early 2006.

Merlo, who has several manufacturing plants in northern Illinois, attributed the plant's move to logistics. "We've had a very tough time getting new business here," he said. "Location wasn't helpful."

Distributor U.S. Foodservice also told the state that it is laying off 147 people in Columbia, where it previously had its headquarters. Company executives said in a statement they will trim a level of managers, close their Columbia office and move functions handled there to their Illinois headquarters.

The new job cuts in Maryland come on top of previously announced layoffs at major Baltimore region employers, including 800 workers at Constellation Energy Group and 200 people at Legg Mason Inc.

Stephen Turk, 23, of Pikesville said he lost his job in the marketing department of a developer of retirement communities this month as part of a large layoff. Being back in the job market is familiar territory for the 2007 graduate of St. Mary's College.

"A year and a half ago, there weren't a whole lot of jobs around, and you couldn't get a foot in the door without any experience," he said. Now, "there still aren't that many jobs, and there are just a whole lot more people out there with me."

The 2008 year-end statistics show the state had an annual average unemployment of 4.3 percent. Because employment was stronger earlier in the year, the state ended up with an increase in annual average jobs, with employers adding 21,100 positions.

The state's economy has been bolstered by jobs in health care, education and the federal government. Yesterday, Gov. Martin O'Malley and Queen Anne's County officials announced that they were bringing new jobs to the area.

Delaware-based Power Electronics Inc., which makes structures for substations, will move its operations to Millington and create 60 jobs in the next two years. It will receive a $150,000 loan from the state provided investment and job targets are met.

Baltimore Sun reporters Jamie Smith Hopkins and Hanah Cho contributed to this article.

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.