Despite record-low unemployment, Md. labor force leaves room for concern, economist says

Unemployment in Maryland fell to 2.0% in June, setting a record low for a fifth straight month. However, these numbers still leave room for concern, an economist says.

Unemployment in Maryland fell to 2.0% in June, setting a record low for a fifth straight month. However, these numbers still leave room for concern regarding the state of jobs in Maryland, according to one economist who warns against celebrating the new data without reservation.New data from the U.S. Department of Labor’s Bureau of Labor Statistics showed a gain of 4,700 jobs in Maryland throughout June, as the unemployment rate fell by 0.4% to 2.0%. Unemployment was as high as 3.0% as recently as January. The state’s unemployment rate peaked at 9.0% during the COVID-19 pandemic in April 2020, and has seen a steady decrease leading up to the most recent data from June.
However, despite the decline in unemployment and noted job gains, Anirban Basu, chairman and CEO of economic and policy consulting firm Sage Policy Group, still finds room for concern.
“The headline numbers make Maryland’s economic performance look better than it is,” Basu said in an email. “Employers are absolutely starved for talent.”
While Maryland and Baltimore have some of the nation’s lowest unemployment rates, Basu said this is due to a lack of growth in the state’s labor force, rather than outright job growth.
Among the sectors that added jobs in June were leisure and hospitality (2,800 jobs); professional and business services (1,300); private education and health services (800); and the public sector (700). Mining, logging and construction saw the most growth, adding 3,900 jobs.
Meanwhile, the sectors of trade, transportation and utilities (2,200 fewer jobs); information (800); manufacturing (600); and financial activities (500) all saw a decline, though these losses did not offset the overall gains from the aforementioned sectors.
Across the nation, 3.8 million jobs have been created since the beginning of the pandemic. However, Maryland has yet to see this same growth and increases in labor force participation, Basu said. This may be due to working Marylanders leaving the state for more opportunity-filled economies, according to Basu, as the state struggles with its labor force.
“Unlike the nation, which has seen some impressive increases in labor force participation recently, Maryland has not,” Basu said. “One suspects that this is because many working Marylanders have left the state to participate in more vigorous environments, including in places like the Carolinas and Florida.”
Statistics such as labor force participation rate, the overall labor force, employment and employment-population ratio have yet to climb back to pre-pandemic figures, despite the sharp decline in employment. The labor force participation rate sits at 65.3%, compared to 69.2% in March 2020, a level reached after steady increases over the previous few years up to that point.
Basu warns that solely acknowledging the headline numbers and continued decline in unemployment ignores some of the larger trends that the state may need to consider to ensure growth moving forward.

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