November 2006
General Economic Trends and Labor Market Information
A Briefer from the
Mayor’s Office of Employment Development
Unemployment Rates
In September, nationally the economy added 51,000 new jobs
and showed an unemployment rate of 4.4%. For the same
month, Maryland employers created 9,500 new jobs. The
unemployment rate decreased in September to 3.7%, which is
0.7 of a percentage point lower than the national
unemployment rate.
Education and Health Care, the strongest sectors in Maryland,
created 10,500 jobs and the Professional and Business
Services sector added 7,200 jobs in the 12-month period.
In Baltimore City, the unemployment rate decreased by 0.6 of
a percentage point to 6.6%. Last year in September, the
unemployment rate was almost identical to this year (6.7%).
Some economists say that the US economy is still growing but
at a slower rate due to higher interest rates, the slowdown of
the housing market and the auto industry. But “September’s
report arrives at a sensitive time: After methodically raising
interest rates over the course of two years, the Federal Reserve
paused in its tightening campaign in August. 1”
Even though economic expansion is below forecasted rates,
some employers are reporting worker shortages in Maryland.
A University of Baltimore survey shows that more than 50%
of companies are planning to add jobs during the next year 2.
Unemployment Among Katrina Evacuees
The Department of Labor conducted a national survey of 1.1
million people who were evacuated in September 2005 after
Hurricane Katrina. The survey showed that 60 percent of
evacuees were living in their pre-Katrina residences and 55.3
percent of evacuees were in the labor force in September
2006. The unemployment rate for all evacuees was 8.3% with
a higher rate among those who do not live in their former
residences (14.5% vs. 4.7%)3.
Hudson Employment Index
The percent of respondents who believe that their personal
finances are getting better is 4.2 percentage points higher than
it was last year. In addition, the percent of people with
worsening personal finances decreased by almost 7 percentage
points compared to the September 2005 survey. The percent
of people who are happy with their current job remained the
same, whereas those who are worried about losing their job
decreased by 1.3 percentage points4.
Drop in Gas Prices
In September gas prices decreased 22.2%, the biggest one-month
drop on record. This led to a 1.3 percent drop in wholesale
prices which is twice the decrease that analysts expected.
Overall energy costs declined 8.4 percent, the biggest drop since
July 1986. However, core inflation (excluding energy and food)
experienced a 0.6% rise due to record gains in new car (2.8%)
and light truck (3.5%) prices, the biggest increases in 16 and 21
years, respectively5.
Population Growth
On October 17th the US population hit the 300 million mark.
Commerce Secretary Carlos Gutierrez stated that “America’s
growing population is good for the economy”. He said that some
European countries and Japan anticipate a decrease of their
population in the coming decades “raising concerns that there
won’t be enough young people entering the work force to
support aging populations”6. The US may have an advantage in
this area as its population is growing due to immigration (40%)
and births.
DOL Study on Employment Trends Among Older Workers
The study found that older Americans retire gradually, in stages,
and they stay longer in the workforce than their predecessors
did. Two thirds of younger retirees move to “bridge jobs”,
sometimes working only part-time, before permanently retiring.
This can be partially explained by the dependence of current
retirees on the performance of the financial markets which in
turn depend on many macroeconomic factors such as the growth
of the manufacturing industry, political environment, etc 7.
More Jobs During Holiday Season
According to the National Retail Federation employers will hire
20 percent more workers for the upcoming holiday shopping
season than they did last year. Retailers are not the only ones
who hire additional holiday workers. For example, UPS is also
planning to hire from 40,000 to 60,000 additional temporary
workers who are not required to have any experience and are
paid $10.50 an hour. Seasonal workers need to be flexible in
terms of work hours. However, many seasonal workers see the
temporary job as a way to get inside the company 8.
http://hudson-index.com/node.asp?SID=4454 – The Hudson Employment Index
http://www.washingtonpost.com/ - Washington Post, October 17, 2006
http://www.washingtonpost.com/ - Washington Post, October 17, 2006
7
http://www.bls.gov/ore/abstract/ec/ec060120.htm - Kevin E. Cahill, Michael D. Giandrea,
and Joseph F. Quinn (2006) "A Micro-level Analysis of Recent Increases in Labor Force
Participation among Older Workers"
8
www.baltimoresun.com. Retrieved on October 30, 2006
4
5
6
1
2
www.baltimoresun.com. Retrieved on October 7, 2006
www.baltimoresun.com. Retrieved on October 21, 2006
ftp://146.142.4.23/pub/news.release/empsit.txt - Department of Labor Statistics,
October 6, 2006
3
Mayor’s Office of Employment Development
November 2006
Area Economic Trends and Labor Market Information
A Briefer from the
Mayor’s Office of Employment Development
Construction of Two Hotels in Baltimore
East Baltimore
The new Hilton hotel, adjacent to the convention center, is
scheduled to open in August 2008. Although the $305
million hotel will face strong competition, a Standard &
Poor’s study found that the new hotel will succeed if it is
able to generate revenue per room numbers similar to those
of an average downtown hotel in 2004. The report
compared similar hotels in Denver, San Antonio and Austin
and concluded that the Baltimore hotel will break even in
2011 if it approaches the market revenue level per room
existing in 2004 ($122 per room) 9.
New development may be brewing in the Eastern part of
the city, in the area around the historic American Brewery
building. “The group, American Brewery LLC, plans to
transform the American Brewery into the Baltimore
headquarters of Humanim Inc., a nonprofit that
specializes in vocational training and support services for
people with disabilities”12.
Unemployment Benefits paid in Baltimore City during the
week ending October 28, 2006 totaled $1,320,014. This
amount was lower than in 2005 and in 2004. During the
last 8-week period (September-October) benefit payments
were decreasing until mid October and then picked up
slightly during the last week13.
Une mployme nt Be ne fits Paid
in Se pte mbe r-Octobe r 2006
Baltimore City
New Stretch of Route 43 Opened
Number of People Crossing County Lines to Get to
Work is Dramatically Increasing
Maryland joined a group of states where more than 10% of
workers travel over 60 minutes to get to their work places.
“Commuting in America III” authored by Alan Pisarski
indicates that commuting trends have been changing: now
more people travel from suburb to suburb (growth of 64%
from 1990 to 2000) instead of the traditional pattern, from
suburbs to central cities (only 14% growth). The report also
says that more people are working from home and
employers will have to become more flexible in setting up
work schedules. In addition, authors found that
employment among people over 65 increased by 21
percent, even though the number of people over 65
increased only by 12%11.
1,360,000
1,340,000
1,320,000
1,300,000
1,280,000
1,260,000
1,240,000
1,220,000
1,200,000
06
06
06
10
/2
8/
20
10
/2
1/
20
6
6
6
10
/1
4/
20
10
/7
/2
00
9/
30
/2
00
9/
16
/2
00
6
1,180,000
9/
9/
20
06
Starting October 23, 2006 drivers began to enjoy a new 3.8
mile stretch of White Marsh Boulevard leading the way to
new business and employment opportunities. Officials hope
that new high-tech industries will come to the eastern part
of Baltimore County as well as new businesses moving to
Maryland through the federal base realignment plan
(BRAC). Two business parks are already under
construction in the Middle River area and developers “are
working to attract companies that specialize in
biopharmacology, information technology, defense
contracting, light manufacturing and business services” 10.
9/
23
/2
00
Another 130-room hotel is expected to open in 2008.
Developer J. Joseph Clarke will be working with
Baltimore’s H&S Properties Inc. to convert the Recreation
Pier at Fells Point into one of the first Aloft hotels in the
country.
Unemployment Benefits
The total amount of benefits paid in Maryland during the
week ending October 28, 2006 was $6,924,844 which was
higher than in 2005 but lower than in 2004. The state
followed the same pattern as did the City of Baltimore
during the last 8-week period.
Towson Loses 70 jobs
Black & Decker Corp. laid off 70 salaried employees in
October 2006 in its Towson, MD headquarters office.
The main reasons cited for making this decision were the
slowing housing market and an increase in competition.
Affected workers will receive severance packages and job
transition counseling14.
9
www.baltimoresun.com. Retrieved on September 7, 2006
www.baltimoresun.com. Retrieved on October 23, 2006
http://www.trb.org/news/blurb_detail.asp?id=6699 – Transportation
Research Board, October 16, 2006
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12
11
13
www.baltimoresun.com. Retrieved on October 18, 2006
http://www.dllr.state.md.us/lmi/claimsactivities/claimsoct7.htm
14
www.baltimoresun.com. Retrieved on October 20, 2006
Mayor’s Office of Employment Development