By Barry Rascovar
May 22, 2017 – Talk about sending mixed messages, the latest jobs report for Maryland can be read as good news or the precursor of bad economic news.
Maryland added 3,500 jobs in April. That’s good, right?
Well, yes, but remember in March Maryland lost 7,900 jobs.
Want another mixed message?
Maryland’s unemployment rate rose slightly to 4.3%. That’s a disturbing sign, small though it may be.
It indicates more people who had dropped out of even trying to find a job are once again seeking work. A larger pool of job-seekers could keep the unemployment rate in Maryland on an upward path.
Yet it’s a good sign that Maryland’s jobless rate remains a notch below the national unemployment rate of 4.4%.
Conflicting Federal Signals
If you want to see an even bigger mixed economic message for the Free State, look at what’s about to happen in dysfunctional Washington.
President Trump will be releasing his first budget this week for the fiscal year that starts Oct. 1. Early indicators point to a fiscal blueprint that slashes domestic programs especially for the poor and the environment but is exceedingly generous to the military.
How do you rate that package, good or bad?
Here’s one more: Trump trumpeted his “great day” in Saudi Arabia over the weekend, where a series of tentative agreements were announced.
The White House claimed these still-evolving deals could be worth $110 billion, much of it in military equipment, plus a still-murky $40 billion joint infrastructure investment fund.
Good for the U.S. economy, right?
But these are merely “understandings” between the two governments. Nothing is written in stone.
First, these purchases may take a long time, if ever, to materialize. Tough and lengthy negotiations lie ahead.
Moreover, the Saudi government is demanding that a vast amount of the spending take place outside the U.S. – in the Arabian kingdom.
Lockheed Martin is trying to lock down $28 billion worth of military contracts with the Saudis, including air-missile defense systems and aircraft.
How much of this work will end up in Maryland remains unclear.
Signed contracts could be a long way off.
And the Saudi government is insisting much of this work be done in their own country. It’s part of the push by the deputy crown prince to move the Saudi economy away from its current over-dependence on petroleum production.
There’s also a sense of urgency in the kingdom to bring down the high unemployment rate among young adults who are well-educated but can’t find work.
So there may be less in Trump’s Saudi agreements for the U.S. economy than at first blush.
Maryland’s bigger problem lies in the soon-to-be-unveiled Trump budget proposal.
The Environmental Protection Agency budget alone is scary: Eliminating the Chesapeake Bay cleanup program, doing away with lead-abatement funding, cutting air and water quality cleanup grants by nearly half and tossing out lots and lots of environmental regulations.
There’s even $12 million set aside for buyouts and early retirement offers – part of the EPA’s determination to shrink the agency and restrict its role in state and local environmental efforts.
The good news is that Congress can disregard Trump’s draconian domestic spending agenda, though it is likely to give the military a huge budget boost. How the American public perceives this dramatic spending shift may remain uncertain until the 2018 elections.
Maryland and Virginia could be the biggest losers.
Trump can accomplish a massive government downsizing without congressional consent. While Capitol Hill may give Trump more money than he requests for domestic programs, the president need not spend that money.
This could mean more Marylanders thrown out of work. For state government, it could lead to a drop-off in tax revenue, a budget crisis in the State House and rising demands from localities for the state to step in and fund programs losing federal support.
Yes, the glass these days can be viewed as half-empty or half-full.
Yet it is hard to see how this is good news for those in Annapolis who must deal with the economic fallout stemming from Republican downsizing efforts in Washington.