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Maryland employers added 9,800 jobs in September, a gain that came almost entirely from the private sector, the U.S. Department of Labor estimated Friday.

The state's unemployment rate dropped to 6.9 percent from 7.1 percent in August, the agency said.

The large increase in jobs -- coming as most of the country saw growth -- is the second gain in a row after five months of losses in the state, according to the Labor Department's preliminary estimates.

Chesapeake Compost Works in Baltimore, which opened this month with its first two employees, didn't contribute to the improving unemployment picture in September. But owner Vinnie Bevivino expects his company will in the near future. His plan is to add 10 to 15 jobs in the next half-year or so.

"These are tough times for people, and unemployment, while it's dropping, is still too high -- so we're excited to be on the hiring end," said Bevivino, whose company is one of only two in Maryland composting food scraps and also accepts wood waste.

Forty-one states and Washington, D.C., saw improvements in their unemployment rates last month, the Labor Department said. Friday's release was the last state-by-state breakdown before Election Day, a final opportunity to see how battleground regions are faring before voters hit the polls.

The jobless rate dropped in Ohio and five other states where President Barack Obama and Republican Mitt Romney are concentrating their campaigns -- Wisconsin, Colorado, Florida, Iowa and Nevada. In two other states the campaigns consider battlegrounds, New Hampshire and Virginia, the rate was unchanged from August.

"Most of the battleground states are doing better than the national average, especially in the key battleground state of Ohio," said Xu Cheng, a senior economist at Moody's Analytics.

Democrat-heavy Maryland is not a battleground, but its unemployment rate also is below the nation's 7.8 percent average.

Most of Maryland's major sectors added jobs in September, according to the government's estimates, which are adjusted to try to account for normal seasonal changes in hiring and layoffs. Only one sector shrank: financial activities, down 300 jobs.

Also on Friday, the Labor Department revised upward its estimate for August growth. The agency's newest figures suggest that Maryland employers added 2,600 jobs that month, rather than 1,400.

Richard Clinch, director of economic research at the University of Baltimore's Jacob France Institute, hesitates to bank on the big September number. It's so large he thinks it may be overstated, given the "imprecision in measurement" of estimating what's happening in every sector of every state each month. But a big number paired with upward revisions for the previous month is a good signal, he said.

"I think the worst is over in Europe, there's a lot of pent-up demand in America, housing appears to have bottomed out, so there are signs that we are going to have a national recovery," Clinch said. "Maryland's economic growth is more or less entirely dependent on how the national recovery goes."

The state's August job growth was driven by an unusually big jump in local-government employment, prompting economists to speculate that it was more a statistical anomaly than an actual increase. September's growth, on the other hand, came despite local government reversing most of that earlier gain with a 6,300-job loss.

But the latest figures suggested state government added 4,300 jobs in September, another unusual gyration. The bump came entirely from state higher education institutions and appeared to be nothing more than getting back to normal after a larger-than-typical drop over the summer break.

"I've not heard of any unusual increase in hiring -- if anything, it's been a rather austere time," said Mike Lurie, a spokesman for the University System of Maryland.

All levels of government combined nearly canceled each other out in September, contributing 200 jobs to the state's expansion. That suggests the real growth came in the private sector.

The professional and business services industry, which includes such disparate fields as computer systems design and waste management, accounted for a significant part of Maryland's gain -- 4,100 jobs. Other growth sectors in September included trade, transportation and utilities, which added 2,000 jobs, and the education and healthcare industry, which added 1,600 jobs.

Even the long-suffering manufacturing sector held steady, according to the Labor Department.

Steve Schneiders, a partner at Sudina Search, a Hunt Valley firm that helps companies find information technology, finance and accounting employees, said he's seen an increase in demand from firms this year. It's a bit slower this month -- typical right before a presidential election, he said -- but not dramatically so.

"We're very optimistic about the job market here," Schneiders said. "I don't know if it's a confidence that things are turning around or what, but I think companies are starting to build again."

For Maryland, awash in federal employees and contractors, a major question mark is what Congress and the next president will do about the nation's budget problems. The sharp, automatic cuts scheduled to start in January if no compromise is reached "would be disastrous for the Maryland economy," said Clinch, the economist.

Gov. Martin O'Malley, a Democrat, was quick to cheer the September numbers as the "single greatest month of job creation in 29 months."

"Our private sector continues to create jobs, and as the hub of growing innovation sectors like cyber security, information technology and aerospace, we continue to prove that we are on the cutting edge of the next wave of job creation," O'Malley said in a statement.

But David Ferguson, executive director of the Maryland Republican Party, said businesses have cut jobs in more months this year than they've added.

"Let's look at the trend -- how many months have we been losing jobs vs. how many months have we been gaining?" he said.

Bloomberg News contributed to this article.

(c)2012 The Baltimore Sun

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