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Downturn cost state fewer jobs than thought

Revised figures suggest recovery may be weaker

By Megan Woolhouse
Globe Staff / March 4, 2011

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The recent recession was milder in Massachusetts than first thought, as the unemployment rate peaked at a much lower level and the state shed fewer jobs than reported previously, according to revised data released yesterday by the state Executive Office of Labor and Workforce Development.

The annual revisions were reported along with monthly employment figures, which showed the state’s jobless rate holding steady at 8.3 percent and employers adding 5,600 jobs in January. The US Labor Department revises state data each year as more information becomes available from employers and statistical agencies.

The state’s unemployment rate peaked in the recent recession at 8.8 percent in October 2009, instead of 9.5 percent in January 2010, according to revised data. The state also shed 24,000 fewer jobs during the downturn that stretched from the spring of 2008 to the summer of 2009. The state lost 143,000 jobs, or 4 percent of employment, compared with the initially reported 167,000, or 5 percent.

At the same time, the revisions showed that recovery in Massachusetts has been significantly weaker than thought, and more in line with the slow national rebound. Over the past year, the state added just 28,000 jobs, compared with initial estimates of about 45,000, according to the revisions.

“History has changed quite a bit. It now looks as if the recession was not as severe, it looks like we lost a lot fewer jobs during the recession,’’ said Northeastern University economics professor Alan Clayton-Matthews. “Over the year, our job growth in Massachusetts was roughly the same as it was nationwide, not stronger as it had been characterized.’’

January marked the fourth consecutive month of employment gains for Massachusetts, another sign that the state’s job market continues to improve. Michael D. Goodman, an economic analyst and professor at the University of Massachusetts Dartmouth, said the nearly 6,000 jobs added in January were encouraging, particularly in the face of rising food and gas prices.

“We are growing; we appear to be adding jobs,’’ Goodman said. “We’re still below the number of jobs we had when we went into the recession, but there are areas of the economy where jobs were created.’’

Also encouraging for the state is an improving national economy, which analysts say will help lift growth in Massachusetts. The national unemployment rate fell sharply in January, to 9 percent from 9.4 percent. Yesterday, the Labor Department said claims for unemployment benefits dropped to 368,000 in the week ended Feb. 26 to the lowest level in nearly three years.

The Labor Department reports national employment and unemployment figures for February today.

In Massachusetts, professional, scientific and business services sectors led job gains in January. The sector, which includes a variety of technology, research and technical firms added 6,700 jobs. Another technology-related sector, information, added 1,000 jobs in January.

Education and health services, the state’s largest employment sector, added 400 jobs in that month, and 10,600 over the year. Financial services gained 300 jobs in January.

Construction added 500 jobs in January. Over the year, however, construction employment is still down 2,300 jobs.

Leisure and hospitality, which includes restaurants and hotels, lost 600 jobs in January. Manufacturing lost 1,900, but has gained 900 over the past year.

This mix of job losses and gains shows that recovery remains uneven, giving people vastly different outlooks depending on the industries in which they work, Goodman said. High-tech workers may find abundant job opportunities or a seeming “feast,’’ Goodman said, while construction workers face a “famine.’’

“It’s the reason why you can have what is undeniably an economic recovery,’’ he said, “even though large portions of the population are not seeing it, feeling it, or believing it.’’

Megan Woolhouse can be reached at mwoolhouse@globe.com.