Latest Report Indicated Improvement in Maryland Labor Market in September
The latest labor report indicated that the Maryland labor market strengthened notably in September. As a result of employment gains across most industries, payroll employment increased by 9,800 jobs. In the household survey, the unemployment rate edged lower by two-tenths to 6.9 percent, reversing its upward trend over the past six months. The latest results of our Maryland Survey of Business Activity remained positive as more respondents indicated that they expanded their workforce than shed workers in October.
Looking at the payroll numbers more closely, the increase in payroll employment was almost entirely due to increases in the private sector. Total government employment edged higher by 200 jobs. Sizeable increases in federal and state government employment (of 2,200 and 4,300, respectively) were almost entirely offset by a drop in local government employment of 6,300 jobs. In the private sector, gains were widespread across industries. The only major sector to register a decline for the month was financial services. Professional and business services employment increased by 4,100 jobs, led by a strong gain in administration, waste management, and remediation services. There were sizeable gains in retail trade and construction. Information, education and health services employment registered moderate increases. Other services edged slightly higher while manufacturing employment was flat for the month. The year-over-year change in total payroll employment was 1.0 percent — the same as in August but down considerably from a recent high of 1.9 percent year-over-year growth in February. Private payroll employment growth over the last year was slightly higher at 1.2 percent, five-tenths below the national rate of 1.7 percent.
The household survey was surprising as it indicated a notable improvement in labor market conditions after six months of deterioration. The unemployment rate declined two-tenths to 6.9 percent, partially reversing the steady increase over the past six months from 6.5 percent in February to 7.1 percent in August. The number of unemployed workers decreased for the first time in eight months. The number of employed in the survey increased by 11,000 workers — the first increase since March — and the labor force posted its first monthly increase since April. As a result, the labor force participation rate edged higher to 67 percent, halting a slide that began in February.
The Maryland Survey of Business Activity has been more positive than the labor market reports in recent months. The latest survey results suggested modest improvement in the labor market in October. Twenty-one percent of respondents indicated that they expanded their workforce for the month while 14 percent shed workers. The number of firms expecting to expand their workforce over the next six months was 18 percent in the October survey, down considerably from earlier in the year when nearly 50 percent indicated that they planned to add workers.
Overall, the labor market reports over the past six months have indicated that the Maryland labor market was very weak, with declining employment and a rising unemployment rate. The positive September results were in stark contrast to that recent trend. Whether this is the beginning of a sustained improvement in the labor market remains to be seen.
R. Andrew Bauer