June ends 'jobs deficit' for Romney

After years of sluggish growth, the Massachusetts economy is finally gaining strength, creating jobs at an accelerating pace and propelling Governor Mitt Romney past an important political milestone.

Massachusetts employers boosted payrolls by 4,400 jobs in June, with gains spread across most of the state's key employment sectors, the state Department of Workforce Development reported yesterday. The state unemployment rate held steady at 5 percent, because more people were looking for jobs.

June's hiring surge also wiped out the remaining shortfall in Romney's so-called ``jobs deficit." After nearly four years, the state finally has more jobs -- 700 more -- than when Romney took office on Jan. 2, 2003.

The state, however, still has 150,000 fewer jobs than at its prerecession peak in early 2001.

Romney took office in the middle of the last recession, when the battered Massachusetts economy had already shed some 150,000 jobs. The state then lost another 55,000 before the labor market hit bottom in December 2003.

``State revenues are surging; jobs are up; and people are feeling more confident about the Massachusetts economy," said Eric Fehrnstrom, Romney's spokesman. ``This is a dramatic turnaround from the dark days of the economic and fiscal crisis that Governor Romney faced when he took office 3 1/2 years ago."

Romney, who is eyeing a presidential bid, is not seeking reelection. But with Lieutenant Governor Kerry Healey running to succeed him, the Romney administration's handling of the economy is a key issue in the gubernatorial campaign.

Democratic hopefuls said yesterday that recovery under Romney has been anything but dramatic, emphasizing that Massachusetts ranks near the bottom among states in creating jobs.

``While it is certainly positive news that we had a one-month gain in jobs, the fact of the matter is it has taken over three years for Mitt Romney and Kerry Healey to net a single new job, while smaller neighboring states like New Hampshire and Rhode Island have created thousands more," Attorney General Thomas F. Reilly said in a statement.

Dan Cence, a spokesman for Christopher F. Gabrieli, another Democratic candidate, said, ``I don't think it's time to break out the champagne just yet to celebrate the creation of 700 jobs over 3 1/2 years."

But Nate Little, a spokesman for Healey, said recent trends clearly indicate job growth is accelerating. ``That's good news for our economy, good news for working families, and good news for companies looking to grow in Massachusetts."

Over the past several months, the pace of job creation has indeed picked up, boosted by a strong national economy and worldwide demand for technology products, economists said. Massachusetts' foreign exports, led by technology products, are running at a record pace so far this year, according to the nonprofit World Institute for Strategic Economic Research at Holyoke Community College.

Since September, Massachusetts has added jobs at 1.2 percent annual rate, about the same as the national pace and nearly double the state's average rate since the state's labor market recovery began at the end of 2003, said Alan Clayton-Matthews, a professor at the University of Massachusetts at Boston. The state has added nearly 28,000 jobs since then.

``We've had the strongest growth since the recovery began," Clayton-Matthews said.

Much of the job growth, economists added, is coming in the high-paying sectors that drive the Massachusetts economy. Professional and business services, which include technology firms, led employment gains in June, adding 2,200 jobs. Over the past year, the sector has added nearly 8,000 jobs.

Another key sector, financial services, added 500 jobs, its sixth consecutive monthly gain. Education and health services gained 800 jobs in June, while manufacturing added 500, that sector's third consecutive monthly gain.

Manufacturing employment has increased by 2,500 jobs since January.

``Not only have the job numbers been positive," said Elliot Winer, chief economist at the state Department of Workforce Development, ``but where we're seeing the growth is really encouraging."

Still, the state's recovery faces risks as surging energy costs cut into consumer spending and rising interest rates cool the housing market. Economists said the housing slowdown has probably contributed to the decline in construction employment, which has fallen in four of the p ast five months, including a 300-job loss in June.

Soft retail hiring led to a 500-job decline in the trade transportation and utilities sector, economists said.

Robert Gavin can be reached at rgavin@globe.com.