Consumer sales push Maryland's economy slightly higher

Daily Record, The (Baltimore), Aug 11, 2006 by John Hopkins

The RESI Maryland Leading Index increased 0.2 percent in May. An indicator of economic performance eight to 12 months out, the index is up 2.3 percent compared to last May, the lowest 12-month increase registered since December.

Components of the index that contributed to the upward move included consumer sales, welfare activity, manufacturing and construction. Increases in unemployment insurance claims and a decrease in airport activity were negative components.

Total employment

State job growth appears to be losing momentum. Maryland's employment market grew less than 0.1 percent in May as only 885 jobs were created. During the past year, more than 37,500 jobs were added, a 12-month growth rate of 1.5 percent and the lowest level of job creation since December.

Unemployment rate

Maryland's labor market contracted in May, causing the unemployment rate to rise to 3.8 percent. The 0.3 percent jump was the largest increase since January 1996 and the second consecutive monthly increase. Despite May's bump up, the state's unemployment rate is almost a half a percentage point below the rate registered last May and almost a full percentage point below the national unemployment rate.

Initial unemployment insurance claims increased 4.3 percent in May, the second consecutive monthly increase, and were 3.3 percent above the number of claims filed last year. Total unemployment benefit payments increased 11.9 percent for the month yet remained 3.3 percent below benefits paid a year ago.

Sales tax receipts

Consumer activity rebounded in May from a soft April. Tax receipts from sales of durable goods, items intended to last three or more years, increased 5.3 percent in May and were up 7.9 percent from sales registered one year ago. Sales of general merchandise, apparel and furniture (GAF) grew 0.2 percent for the month and were up 5.2 percent from last May.

Airport activity

Passenger traffic at Baltimore/Washington International Thurgood Marshall Airport slipped 0.3 percent in May, ending a streak of four consecutive monthly increases. Over the past 12 months, however, passenger traffic is up 7.3 percent.

Home sales

More than 7,300 homes were sold in May, an increase of 1.1 percent for the month. Sales still remain well below prior-year levels as volume was 15.3 percent below home sales settled last May. Pending sales were down 4 percent for the month and 11.6 percent for the year.

The number of homes available for sale grew 3.5 percent in May to just fewer than 35,400, the highest inventory level since December 1998. For the year, the housing stock grew 122.5 percent, the fifth consecutive month of above 100 percent 12-month growth.

Home prices rebounded in May from April's decline. The average home sales price grew 1.3 percent to more than $362,000 for the month, which is 9.3 percent above the average value registered last May. The median home sales price grew 0.1 percent for the month and 9.4 percent for the year.

Residential building permit activity increased 8 percent in May yet remained 10.5 percent below prior-year levels. Building permit values declined 7.9 percent for the month and were 20.2 percent below values filed 12 months ago, the largest annual decline in more than two years.

Automobile sales

Sales of new and used cars were up in May. New car sales increased 4.5 percent for the month and 2 percent for the year, ending an eight-month streak of annual declines. Sales of used cars increased 6.8 percent for the month, the largest one-month gain since last August.

John Hopkins, an economist with RESI of Towson University, analyzes Maryland's economy every month for The Daily Record.