Mass. unemployment rate falls to 8.4 percent

By Robert Gavin, Globe Staff

The Massachusetts unemployment rate last month fell to its lowest level in more than a year, but the state's economic recovery showed signs of slowing as employers slashed jobs across several sectors.

The jobless rate dove to 8.4 percent from 8.8 percent in August, hitting the lowest level since May 2009, the state Executive of Labor and Workforce Development reported today. A separate survey of employers, however, showed Massachusetts firms cut payrolls by more than 20,000 jobs in September, with the losses concentrated in leisure and hospitality, a tourism related sector, and education and health services.

In addition, revised data showed the state also shed 3,000 jobs in August, instead of the initially reported gain of 2,100 jobs.

The mixed data suggest that the state's recovery is still proceeding, but the struggling national and international economies are beginning to weigh on Massachusetts, said Michael Goodman, an economic analyst and professor at the University of Massachusetts at Dartmouth. Despite September's job losses, the longer-term trend -- more than 34,000 jobs added in the last six months -- still bodes well for the state, said Goodman.

"The trend still supports the notion that the Massachusetts is recovering faster than the nation," Goodman said. "But the larger story is we may be seeing the some of the impact of slowing national and international economies."

The US economy has shed jobs in each of the past four months, while the national unemployment rate has held near 10 percent. Also struggling are the economies of many industrialized nations, particularly in Europe, a major foreign market for Massachusetts companies.

Today's unemployment report is the last before the next month's gubernatorial election. David Paleologos, director of Suffolk University’s Political Research Center, said it's unlikely to change the dynamics the campaign, which has focused on Governor Deval Patrick's handling of the economy.

Ironically, Paleologos said, his polling shows Patrick's support is strongest in older cities with the highest unemployment, while voters suburban and rural areas, with the lower jobless rates, favor his Republican opponent, Charles Baker. Also running are state Treasurer Timothy Cahill, an Independent, and Jill Stein, the Green-Rainbow Party candidate.

"The overriding factor is the juxtaposition of Massachusetts vs. the nation," Paleologos said. "We’re not Ohio, where the rate is higher than nation and the situation is dire."

Over the past six months, the state has added jobs at an annual rate of about 2 percent, or more than double the pace nationally.

"We are trending in the right direction," said Joanne Goldstein, state secretary of Labor and Workforce Development.

Employment and unemployment data come from separate surveys: one of households, which is used to estimate the unemployment rate, and one of employers, which provides job estimates. Sometimes, because of the different samples, the data can diverge sharply, particularly on a month-to-month basis.

One month's data should not get too much emphasis, economists say. Instead, analysts need to look at longer trends.

Over the past year, said Andrew Sum, director Northeastern University's Center for Labor Market Studies, the two surveys are consistent, each showing employment gains of about 23,000, an increase of less than 1 percent.

The job losses in September and August, Sum said, suggest that the recovery has not been as strong as it appeared earlier in the summer. Over the past few months, much of the job gains have been concentrated in the leisure and hospitality, due, at least in part, to a rebound in tourism this summer, Sum said. Now that the summer has ended, those jobs are gone.

"It's hard to believe you could base a recovery on leisure and hospitality," Sum said. "The question still is, how are we going to get more broad-based job growth?"

Job gains last month were concentrated in professional sectors that tend to pay more and require higher levels of education and skills. Financial activities added 1,300 jobs; professional, scientific, and technical services 1,200; and information, which includes software publishers, 500.

Leisure and hospitality shed more than 11,000 jobs and education and health services nearly 6,000. Construction lost 1,600 jobs; manufacturing 1,300; and retailers, 200.