Region’s unemployment rate rises to 3.3 percent

So. Md. still lower than all but 3 other counties

Friday, July 4, 2008

The 3.3 percent May unemployment rate in Calvert, Charles and St. Mary’s counties, erase steady declines that had been reported since the beginning of the year. Calvert’s unemployment rate was 2.8 percent in April, while Charles and St. Mary’s registered 2.9 percent.

Even with the increases, only Howard, Montgomery and Carroll counties have lower unemployment rates than the three Southern Maryland jurisdictions, according to the May report from the state Department of Labor, Licensing and Regulation. Dorchester and Worcester counties were the only jurisdictions where the unemployment rate declined in May.

The statewide unemployment rate jumped four-tenths of a percentage point to 4 percent in May and the national average soared a half-point to 5.5 percent, which represents the biggest one-month jump since 1986. That means unemployment rolls grew by 861,000 people nationwide since April.

The statistics, however, merely reflect the usual employment ebb that occurs in May when college graduates flood the labor force, said Mary Jo Yeisley, an administrator in DLLR’s Office of Workforce Information and Performance.

‘‘Generally, during this period of time, even when the economy is gangbusters, you tend to ... see an increase in unemployment because of the fact that schools are ending, and all your students and people who are looking for seasonal work come into the job market looking to get them through the summer,” she said.

And even though more jobs are being created in Maryland — about 6,500 since January, including 1,100 in May — it’s not enough to offset the increased workforce, Yeisley added. ‘‘Although the number of employed people [is] going up, they’re not going up as fast as the labor force is growing. It’s that imbalance that adds people to [the] unemployment [rolls].”

Unemployment figures historically peak in July when school-year employees are on hiatus and other seasonal employees are out of work, Yeisley said.

One economist warned not to read too much into the monthly statistics, particularly the ballooning statewide and national figures, because it’s not the most accurate reflection of unemployment

‘‘The economy’s just not deteriorating that rapidly,” said Peter Morici, an economic s professor at the Robert H. Smith School of Business at the University of Maryland College Park. ‘‘They don’t bear out that kind of job loss.”

What’s more telling, he said, is the incremental growth in the unemployment rate since January. That trend is likely to continue at least through 2008, if not longer, Morici predicted.

The national unemployment rate shot up a full percentage point from 4.5 percent a year ago, which might be the most troubling statistic.

The sputtering economy might partially account for rising unemployment, but it is not a big factor, Yeisley said.

‘‘The magnitude of the increase might very well have been because of the general softness of the economy,” she said. ‘‘There’s not as many opportunities readily available as there might have been in recent years.”

Still, companies are expanding or moving to Maryland, which was one of only 10 states that saw positive job growth in the past year, DLLR Secretary Thomas E. Perez said in a news release. Last month, job gains occurred in health services, while losses mounted in the construction, manufacturing and finance sectors.

For instance, cable giant Comcast Corp., recently opened a 500-employee call center in Largo, while electronics retailer Best Buy is laying off more than 100 employees at its electronics repair service center in Elkridge and The (Baltimore) Sun announced last week that it will slash 100 jobs, mostly in its newsroom.

For all its troubles, Maryland compares favorably with its neighbors. Virginia was the only state bordering Maryland boasting a lower unemployment rate — 3.9 percent — in the May report. Michigan had the highest rate in the nation in May at 8.5 percent, up from 7.1 percent a year ago. South Dakota and Wyoming posted the lowest rates at 2.9 percent

Morici said it’s hard to predict when the economy will pick up, but characterized the current situation as ‘‘a low-grade recession” in which the economy isn’t shrinking, but is experiencing very low growth.

‘‘It’s more like a malaise,” he said. ‘‘Back in the 1950s, the economy would actually contract, but right now we’re not seeing that.”