Commentary: Md. economy continues to grow, but job, house markets

The RESI Maryland Leading Index, an indicator of economic activity over the next eight to 12 months, increased 0.8 percent in November, rebounding from October's revised decline of 1 percent.Furthermore, the index was up 3 percent from last November.Components of the index that contributed to its growth included welfare, manufacturing, unemployment, construction and airport activity. Sales activity and interest rates were negative components of the index.Total employmentMaryland's job market weakened in November, losing more than 2,200 jobs over the month, a decline of 0.1 percent. Annual job growth softened to 1.7 percent, the slowest 12-month pace since last October. Unemployment rateThe state's unemployment rate increased to 4.2 percent in November after holding steady at 4.1 percent the previous two months. The upward movement was a result of an increase in the number of residents unemployed and a slight contraction in the overall labor force.Unemployment claimsFirst-time claims for unemployment insurance edged slightly upward by 0.5 percent to 17,633 in November, the second consecutive monthly increase. However, total unemployment benefits paid decreased 9 percent for the month and were down 22.6 percent from benefits paid last November.Sales tax receiptsMaryland-based consumer spending was mixed in November. Sales of durable goods, items intended to last three or more years, increased 0.7 percent for the month after declining 1.1 percent in October, and were up 6.7 percent from last year. However, sales of general merchandise, apparel and furniture (GAF) declined 2.7 percent, the largest one-month drop since last June.BWI Airport activityActivity at Baltimore/Washington International Thurgood Marshall Airport improved in November. More than 1.7 million passengers passed through the airport, an increase of 2.6 percent from the previous month and 3.5 percent from last year. Similarly, freight shipments were up 1.9 percent for the month and 7.8 percent for the year.Home salesMaryland's housing market is finally showing signs of weakening. Sales of existing homes decreased 3.4 percent to 7,832, the lowest volume of sales since November 2003. Annually, sales are down 15.4 percent, the largest 12-month decline since May 1997. Pending sales grew 2.6 percent for the month, but were still down 3.1 percent from last November.Home inventoriesThe slowdown in sales has helped to push home inventories higher. More than 25,000 homes were available for sale in November, an 8.8 percent jump from the previous month and 133.3 percent higher from inventories registered a year earlier.Home pricesHome prices continue to rise at a strong pace despite slowing sales and accumulating inventories. The average home sales price grew to more than $351,000 in November, an increase of 1.3 percent for the month and 17.5 percent higher than the average price registered last November. The median home sales price increased 2.0 percent for the month and 20.8 percent for the year.Residential building permitsAfter falling in the past two months, residential building permits increased 7.9 percent in November and were up 3.3 percent from the number of permits registered a year ago. Permit values rose 3.7 percent for the month, but were down 1.9 percent from last November.Automobile salesSales of new and used automobiles rebounded from a dreary September and October. New and used car sales increased 14.6 percent and 4.4 percent in November respectively. However, sales were still below prior-year levels.John Hopkins, an economist with RESI of Towson University, analyzes Maryland's economy every month for The Daily Record.

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