Local jobless rate could surpass early '90s levels

Unemployment in Massachusetts is rising so quickly that the jobless rate could soon surpass the level reached during the recession of the early 1990s, the University of Massachusetts reported today.

The state's unemployment rate has jumped 1.4 points since the end of last year, to 7.8 percent, the highest rate since March 1993. If the current pace continues, the rate will top the 9.1 percent reached in 1991 and 1992, said Alan-Clayton Matthews, economic analyst and professor at the UMass-Boston.

'In recent months, the state's economy has declined at a rapid rate,'' Clayton-Matthews said. "Measures of unemployment had been rising at a dizzying pace."

The rapid deterioration of the job market was among the factors that led UMass to downgrade its estimate of the state's economic performance at the end of last year. Annual revisions by the US Bureau of Labor Statistics to state employment data showed Massachusetts losing more jobs than first estimated. In particular, the pace of job loss accelerated rapidly at the end of last year, with employers slashing nearly 50,000 jobs in the last two months of 2008 alone.

The Massachusetts economy shrank at a 4.2 percent annual rate in the fourth quarter of 2008, compared with an initial estimate of 3.5 percent, UMass said. The national economy contracted at a 6.3 percent annual rate in the same period, the Commerce Department reported today.

UMass estimates that the Massachusetts economy will shrink faster in the first three months of this year, at a 4.7 percent annual rate. The decline will slow in the second three months, to a 3.9 percent pace, according to the UMass forecast.

The slowing rate of decline suggests that the state economy could hit bottom and begin to recover before the year is out, UMass said.
(By Robert Gavin, Globe staff)