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Maryland’s jobless numbers decline

Maryland’s unemployment rate fell in October for the first time in six months, but economists and labor officials cautioned Tuesday the state faces immense challenges as the economy recovers slowly and federal lawmakers debate deep budget cuts.

DLLR Secretary Alexander M. Sanchez

“October’s improvement should probably not be interpreted as a sign of further improvement to come,” said Anirban Basu, chairman and CEO of Sage Policy Group Inc. “The debt ceiling committee has failed to reach an agreement, automatic cuts in spending, including department of defense spending, could be triggered, and none of this would be good for Maryland’s economic momentum.”

Richard Clinch, director of economic development at the University of Baltimore’s Jacob France Institute, said a double-dip recession is still possible, though not probable.

“We are shooting ourselves in the foot nationally, maybe even both feet,” he said. “The failure of Washington to get its act together, coupled with economic uncertainty in Europe that is spreading to Asia, could be the thing that pushes us into a double-dip recession. That’s pathetic.”

The state’s unemployment rate dropped to 7.2 percent in October from September’s 7.4 percent, according to the state Department of Labor, Licensing and Regulation. Employers in Maryland added 3,100 net new jobs to their payrolls, according to the seasonally adjusted data.

The trade and transportation sector had the strongest showing, adding 2,100 jobs, including 1,300 in retail. The financial sector, which includes real estate and leasing agents, added 1,500 jobs, and education and health care added another 1,400. The state government boosted employment by 1,800.

Construction was down 1,100 jobs on the month and 3,700 compared to October 2010. Manufacturing, another weak spot for Maryland, lost 200 jobs and posted a year-over-year decline of 2,100. Leisure and hospitality employment dropped 1,300 on the month, and 3,900 compared to the year before.

DLLR Secretary Alexander M. Sanchez acknowledged those sectors have been “choppy” and said construction will be a focus of the jobs package Gov. Martin O’Malley is expected to introduce during the 2012 legislative session.

“I think it will be the top of the agenda as soon as the session opens in January,” Sanchez said.

He noted the 20,400 jobs added to Maryland’s payrolls since the beginning of the year is the largest such increase 2005. The state added 30,500 jobs over that period, with much of the gains coming from sectors that include construction workers and government contractors.

While construction has been weak in 2011, the contracting sector has been a strength, accounting for 5,700 of the 20,400 jobs added.

Those contractors and federal government employees would be hit hardest by federal budget cuts.

The cuts have not been finalized and would not hit until 2013, but Basu said agency spending could slow as early as next year.

“It would be hard to argue that the economic impacts are greater before the cuts than during the cuts,” he said. “But, it may be the case that certain federal agency cuts will respond to expected cuts by hoarding cash now. Operational adjustments may begin almost immediately.”

That uncertainty and otherwise weak growth left the economists and Sanchez unable to forecast labor market performance into 2012, or even through the end of this year.

“I think we can expect significant uncertainty and wide swings in these numbers,” Clinch said. “If the federal government decides it’s not going to ruin the recovery, we’ll chug along.”