December Report Indicated Continued Improvement in Maryland's Labor Market
The latest labor report indicated that employment conditions improved in December. In the establishment survey, payroll employment increased by 4,900 with gains in most industries. Private employment increased by an even greater 7,700 jobs. In the household survey, after declining from 7.1 percent in August to 6.6 percent in November, the unemployment rate remained at 6.6 percent in December.
Looking at the payroll numbers more closely, the increase in employment was fairly widespread across industries. The sectors with the largest increases were leisure and hospitality, and professional and business services, each gaining more than 2,000 jobs. There were also notable increases in health care, transportation and public utilities, and construction. Offsetting those increases were declines in government, retail, and wholesale trade.
For all of 2012, the net increase in total payroll employment was 21,100 jobs. Two sectors — professional and business services and health care — accounted for the majority of the job creation, increasing by 21,300 and 8,800, respectively. Employment in natural resources, mining, and construction also rose notably in 2012, by 4,100 jobs. The sectors with the largest declines were government, manufacturing, and financial services. The year-over-year percentage change in total payroll employment was 0.8 percent — considerably less than the 1.4 percent rate for the nation. Private employment increased by 31,300 for the year, a 1.5 percent increase which was close to the national year-over-year rate of 1.8 percent.
The household survey indicated that the improvement in the labor market was more modest in December. The unemployment rate was unchanged at 6.6 percent and the number of unemployed increased for the first time in four months. However, there was a sizeable increase in the number of employed workers in the survey for a fourth consecutive month. The labor force participation rate edged higher by one-tenth to 67.6 percent, and was up seven-tenths from its recent low in August 2012.
The latest results of our Maryland Survey of Business Activity suggested weaker conditions in the labor market in January. Fifteen percent of respondents indicated that they expanded their workforce for the month while 24 percent shed workers. This was the first time since late 2010 that more respondents indicated that they lost workers than added for two consecutive months. Roughly one-third of firms in the survey indicated that they planned to expand their workforce over the next six months while 17 percent indicated they planned to make reductions.
Overall, the Maryland labor market ended the year on a positive note. After weaker conditions in the summer and early fall, the last four reports indicated stabilization and general improvement. The unemployment rate fell 0.5 percentage point over that period and private payroll employment rose in three of the final four months for an average monthly gain of nearly 7,000 jobs. However, the unemployment rate ended the year at the same level as December 2011, highlighting the lackluster improvement in conditions in 2012.
R. Andrew Bauer