Econ­o­mists see mixed signs in Md.’s jobs re­port

Baltimore Sun - - FRONT PAGE - By Natalie Sher­man

Mary­land’s la­bor mar­ket re­cov­ered some ground in Septem­ber af­ter sev­eral months of lit­tle or no growth, but some econ­o­mists worry hir­ing is likely to slow more in the months ahead.

Some even sug­gested the pos­si­bil­ity of a re­ces­sion as soon as next year, the first since the fi­nan­cial cri­sis and hous­ing bust in 2008.

Yet the U.S. La­bor De­part­ment’s Septem­ber jobs re­port Fri­day showed em­ploy­ers in the state adding 3,400 jobs last month and the un­em­ploy­ment rate fall­ing to 4.2 per­cent, be­low the 5 per­cent na­tional rate.

Mary­land’s la­bor mar­ket also looks stronger on an an­nual ba­sis. The num­ber of jobs in Septem­ber was up about 1.7 per­cent from Septem­ber 2015 — on par with the na­tional growth rate and in line with pre­vi­ous months, ac­cord­ing to the es­ti­mates, which were ad­justed for sea­sonal vari­a­tion.

But the Septem­ber gain was off­set by a sharp down­ward re­vi­sion to pre­vi­ous es­ti­mates for Au­gust. Fri­day’s re­port found the state lost 4,400 jobs in Au­gust, in­stead of adding 700 as ini­tially re­ported. Pay­rolls were about 1,000 lower than in July, ac­cord­ing to the es­ti­mates.

Econ­o­mists said the end-of-sum­mer

fluc­tu­a­tion may be a sta­tis­ti­cal fluke, traced to the dif­fi­cul­ties of es­ti­mat­ing hir­ing at the start of the school year. But the big­ger pic­ture re­mains un­clear. The most re­cent sur­vey of Mary­land firms by the Fed­eral Re­serve Bank of Rich­mond found hir­ing ex­pec­ta­tions dropped sharply in Septem­ber. The state also cut its rev­enue fore­cast last month, cit­ing slower growth and limited wage in­creases.

Na­tional growth picked up in the sec­ond quar­ter of this year, but at 1.4 per­cent, gross do­mes­tic prod­uct gains re­mained be­low his­toric rates. Other na­tional in­di­ca­tors have been weak. Job open­ings and con­sumer spend­ing de­clined in Au­gust, while hous­ing starts con­tinue to lag in the U.S. and in Mary­land.

Econ­o­mist Daraius Irani said the sum­mer slow­down may be the first hint of even more mod­er­ate growth in the com­ing months, per­haps slip­ping the econ­omy into a re­ces­sion.

“We’re prob­a­bly start­ing to see the be­gin­ning edges of it,” Irani said.

R. An­drew Bauer, a se­nior econ­o­mist for the Fed­eral Re­serve Bank of Rich­mond, said he thinks con­cerns about a re­ces­sion are overblown. With more peo­ple work­ing, it makes sense that hir­ing would slow, as it takes busi­nesses longer to find work­ers, he said.

Bauer said he hasn’t seen bub­bles in the econ­omy that would trig­ger a big­ger slow­down.

“When I look at the data for the la­bor mar­ket for Mary­land, there’s mixed re­sults for the most re­cent pe­riod, but over­all it’s very pos­i­tive and sig­nals an econ­omy that’s grow­ing in a very bal­anced way,” he said.

But econ­o­mist Anir­ban Basu, CEO of Sage Pol­icy Group, said he thinks the val­ues of some as­sets, such as stocks and com­mer­cial real es­tate, have been pushed ar­ti­fi­cially high, as low in­ter­est rates lead in­vestors to seek riskier, po­ten­tially higher-yield prod­ucts

Mary­land’s econ­omy could be vul­ner­a­ble if those val­ues re­set, since many of the state’s fam­i­lies rely on the stock mar­ket to bol­ster house­hold in­come, he said.

“What will drag us down are not Mary­land-spe­cific fac­tors but global and na­tional fac­tors,” said Basu, who said a re­ces­sion could oc­cur in the next two years.

The em­ploy­ment gains re­ported Fri­day were pow­ered by the pub­lic sec­tor, with the gov­ern­ment adding 4,900 jobs. Pay­rolls in the fi­nan­cial sec­tor in­creased by 1,500 jobs, while pro­fes­sional and busi­ness ser­vices firms added 700 po­si­tions.

Ed­u­ca­tion and health ser­vices em­ploy­ment fell by 1,800, while jobs in the leisure and hos­pi­tal­ity sec­tor dropped by 1,600. Pay­rolls in the trade, trans­porta­tion and util­i­ties sec­tor fell by 1,300.

“It’s a mixed mes­sage, a mixed bag,” Basu said. “Mary­land’s econ­omy is not boom­ing but it does con­tinue to progress.”

One prob­lem for hir­ing is that job ap­pli­cants don’t al­ways have the skills em­ploy­ers are seek­ing.

The U.S. De­part­ment of La­bor on Fri­day said it would give Mary­land a $2 mil­lion grant to ex­pand ap­pren­tice­ships, which sup­port­ers say of­fer strong paths to em­ploy­ment. The state De­part­ment of La­bor, Li­cens­ing and Reg­u­la­tion hopes to use the money to cre­ate 9,000 new ap­pren­tice­ships over the next 18 months, tar­get­ing in­dus- tries such as health care, cy­ber­se­cu­rity and man­u­fac­tur­ing.

Hir­ing is shift­ing, as new tech­nol­ogy and reg­u­la­tions rip­ple through dif­fer­ent in­dus­tries, said Scott Rifkin, CEO of Mid-At­lantic Health Care, which pro­vides skilled nurs­ing and re­ha­bil­i­ta­tion ser­vices at fa­cil­i­ties in Mary­land and Penn­syl­va­nia.

That busi­ness has added work­ers, but much of the pay­roll growth is due to ac­qui­si­tions, he said. By con­trast, Rifkin said he’s also brought on more than 20 peo­ple in the last six months to staff re­cently started health in­sur­ance and data min­ing com­pa­nies.

“It de­pends on where you work in the sec­tor,” he said. .

Rosoff ex­am­ines Ja­maican limes, which wound up be­ing ap­proved. Cus­toms agents look for foods that could po­ten­tially harm Amer­i­can agri­cul­ture.

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