Maryland employers slashed 6,200 jobs in April, cutting short a string of gains, the U.S. Department of Labor said Friday, as the state began feeling the pinch of federal budget sequestration and cutbacks in consumer spending.
But the government's separate survey of households showed that Maryland's unemployment rate dropped to 6.5 percent in April from 6.6 percent a month earlier. The surveys of jobs and residents don't always move together, in part because Marylanders commuting across state lines or starting businesses don't affect the count of jobs.
April's job cuts came entirely in the private sector, with sharp drops in the hospitality and professional services sectors. Economists said those decreases likely reflect pullbacks in consumer spending and sequestration cuts to the federal budget that spilled over to private companies. Government agencies, which have bumped between gains and losses in recent months, added 2,400 jobs in April, the Labor Department estimated.
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The agency also lowered its prior job growth estimate for March, saying employers added 2,600 jobs rather than 4,700. April's jobs loss ended four months in a row of gains, but the revision for March indicated slowing growth.
"What we're finally seeing is the impact of fiscal drag measures that took place at the beginning of the year, most notably the expiration of the payroll tax holiday that increased taxes on every single person in Maryland's paycheck," and crimped consumer spending on leisure, said Bradley Turner, an associate economist at Moody's Analytics. "It finally shows some of the impact of not only higher taxes but sequestration coming into play. This is certainly a bad sign for the Maryland economy, but it's not dire. It's more or less in line with expectations."
He said he expects growth in other areas will help offset weakness in the consumer sector.
Economists have warned that the sequestration cuts would likely affect Maryland beginning this spring, showing up among federal contractors and businesses that rely on consumer spending. Both Fort Meade and Aberdeen Proving Ground have been slowly reducing contract work to prepare for the loss of funds, Turner said. He expects the business services, retail and hospitality sectors to lose momentum in the next few months, slowing employment growth in the state.
The employment report showed that about 206,000 Marylanders were unemployed and actively looking for work in April.
One of them was Patrick Clarke, a 20-year-old East Baltimore resident, who lost his job in March at a Bel Air car dealership where he had worked for a year. Since then, he's relied on unemployment to pay rent on the house he shares with his brother, who also was laid off from the car dealership. He's looked for work mostly at restaurants. On Friday, Clarke found himself for the first time at the city-run Eastside One-Stop Career Center on East Madison Street, where he attended a job search workshop.
"It's been tough. I have to shoulder everything and look for jobs," said Clarke, who said the workshop gave him ideas for polishing his resume and broadening his search. "I stay positive. Something's going to come."
Toni McNair, a Northeast Baltimore resident with a social work background and two decades of experience as a case manager, has been looking in her field for more than two years but finally decided to try something different. On Friday, McNair applied for a job as a Mobility bus driver at the East Madison Street career center.
"I haven't found anything, and this is open," she said after an interview with the bus company.
The center tries to match applicants such as McNair with employers that are hiring, said Craig Lewis, a division director in workforce operations for the Mayor's Office of Employment Development, which runs the One-Stop center.
"There are some opportunities, and employers are looking for qualified people, but the employers are flooded with applicants," he said.
Despite the state's job losses in April, Turner said he expected the state's economy to keep "chugging along," without more monthly job losses or any increases in unemployment. Maryland was one of 40 states in April that saw its jobless rate decrease. But the state fared worse than most others in the number of jobs lost, dropping 6,200 jobs while 30 states saw job growth, the Labor Department said.
State officials said the month's job losses come amid progress in job recovery. The state added 34,600 jobs, 31,200 of them in the private sector, between April 2012 and last month.
Demand for workers is stronger than it was a year ago in fields such as health care, finance, accounting and marketing, said Dawn Sloan, area director for Maryland for staffing firm Adecco.
"Especially in health care … there is a lot of need," she said.
"We are not seeing any declines among our larger customers in the area," including small businesses and corporate entities, Sloan said. "The one consistent need is the need for someone who is skilled or who has transferable skills."