Maryland’s loss of 11,000 jobs in June, according to preliminary federal data released Friday, is “deeply unnerving,” says one noted economist.
It’s the fourth straight month of job losses for Maryland. The state lost 2,900 jobs in May — the loss was initially pegged last month at 7,500 — with 5,400 jobs lost in April and 600 lost in March.
“These are not positive numbers,” said Anirban Basu, chairman and CEO of the Sage Policy Group in Baltimore. “It’s now quite apparent that Maryland’s economy is slowing faster than the nation, including in the most important category, job growth.”
The state lost jobs in every sector except financial activities, which gained 900 jobs, and government, which gained 2,000. Maryland had the nation’s third-highest job loss in June, surpassed only by 12,100 in Tennessee and 13,200 in Wisconsin, according to the federal numbers.
Two sectors in Maryland — education and health, and leisure and hospitality — were especially hit hard in June, with losses of 7,600 and 2,800, respectively. But the timing of the report, around the same time that many schools closed for the summer, might have contributed to the larger job losses in education and health, Scott R. Jensen, interim secretary of the Maryland Department of Labor, Licensing and Regulation, said during a conference call.
The state’s unemployment rate also rose to 6.9 percent, up from 6.7 percent in May.
Basu said it was “quite likely” the job losses will continue over the near term, just as several economists have been predicting for Maryland.
While Maryland gained jobs at a fairly robust pace in late 2011 and early 2012 due to the effects of the military base realignment program and a steadier flow of federal spending — both of which served as “turbo-chargers” for the economy and labor market — that money has begun to slow, he said.
He also pointed to the legislature’s decision to raise income taxes as a possible factor in businesses choosing not to expand or hire in the state.
Benjamin Orr, a policy analyst with the Maryland Budget and Tax Policy Institute, disagreed that the tax increase on higher-income residents has had an impact on hiring.
“It’s reflective of the continuing weak recovery from the recession,” Orr said. “We’re continuing to struggle to rebuild the housing market, although there have been some positive signs. But people are still worried about the European market and about what action Congress will take on tax cuts.”
Orr’s institute is a project of the Maryland Association of Nonprofit Organizations.
“There’s more jobs in Maryland than we had a year ago and we’re better off than the country as a whole,” he said.
Maryland had almost 25,000 more people working this month than in June 2011. The losses in the past four months followed big gains of 8,000 in February and 9,100 in January
“But that doesn’t make it any easier for those who are unemployed or under-employed,” Orr said.
In his own statement, Gov. Martin O’Malley (D) tried to cast the state’s economy in a brighter light, speaking of home sales reaching their highest levels in two years and home sale prices reaching a near three-year high.
“With all our economic indicators demonstrating positive trends, we would not be surprised if the Bureau of Labor Statistics once again significantly revises these preliminary numbers,” O’Malley said. “Last month, they not only reported the loss of 1,500 state government jobs we knew not to be true, but also added back 4,600 jobs that their initial report claimed were lost.”
The federal connections that served Maryland well during the Great Recession now jeopardize the state, as many anticipate more federal spending cuts, Basu said.
“If even modest decreases have this kind of impact, imagine the impact of larger ones,” he said.
He emphasized the need for the state to attract enough private money to offset the loss of spending in the public sector.