State jobless rate rises to US level

The Massachusetts unemployment rate made a sudden and surprising swing upward in December, rising for the first time in four months and ending a nearly nine-year streak in which the state jobless rate stayed below the national average.

As employers cut another 7,100 payroll jobs in December, the state jobless rate rose two-tenths of a point to match the US rate of 5.7 percent. It was the first time since March 1995 that Massachusetts failed to post a lower rate than the United States, according to the state Division of Employment and Training.

"We are still struggling," said David Pace, regional economist at Global Insight, a Waltham research and consulting firm. "It certainly paints the picture that none of the momentum picking up in the national economy has filtered into the Bay State employment."

Yesterday's report, analysts said, was particularly disappointing, given recent evidence that the national recovery is at last gaining traction and beginning to pull Massachusetts out of its long and deep recession. Over the past few months, any number of economic reports -- nationally and in Massachusetts -- have pointed to a brightening picture, including booming production, growing confidence, and accelerating business investment, particularly in technology.

But the job market remains stubbornly weak and so far has defied predictions that a broad recovery in employment is imminent. The United States added a mere 1,000 jobs in December, and the decline in the national jobless rate was driven primarily by workers giving up job searches and dropping out of the labor force, the Labor Department reported this month.

Economists have largely blamed surging productivity, in which employers get more production out of existing workers and plants, and the shifting of jobs overseas as the main reasons for the so-called jobless recovery.

Alan Clayton-Matthews, a professor of public policy at the University of Massachusetts at Boston, said the December job losses in Massachusetts could not be explained as a statistical fluke.

"The decrease in payroll employment is a large decline, much larger than what the economy has been experiencing, and is pretty widespread," Clayton-Matthews said. "It makes one worry about the trends in the economy."

It certainly is worrying Karen Wontan, 42, of Mattapan, who has been out of work since February, when she was laid off from an administrative job at FleetBoston Financial Corp. If anything, Wontan said, the job market seems to be getting tighter.

"There are more people getting laid off, and more people newly getting into the job market," Wontan said. The number of people out there "keeps increasing, but the jobs aren't."

Ironically, this increase in job seekers may be a positive sign. Typically, economists said, a rebound in employment is preceded by an increase in the labor force as more people, including discouraged workers, sense the turnaround and begin seeking jobs.

Much of the increase in the Massachusetts unemployment rate appears to be driven by just such a jump in the labor force, which grew by nearly 6,000, compared to a decrease of nearly 4,000 in November.

Economists noted another positive sign: Temporary hiring, considered a leading indicator for the job market, surged in December, adding about 1,400 jobs.

Kimberly Miller, 35, of Dracut, is an example. She lost her job as a secretary at the end of 2002 and spent the next six months in a fruitless job search. She gave up for a few months, but recently resumed her hunt. She landed a temporary job as an executive secretary at Fresenius Medical Care North America in Lexington, a maker of dialysis products and provider of dialysis services. And now, she's hopeful that the temporary job will become permanent.

"December was a very strong month," said Aaron Green, president of Professional Staffing Group, the Boston firm that placed Miller. "There was a lot of optimism from companies coming through in December, although that has plateaued."

Despite such caution, many economists still expect job growth to pick up this year, albeit modestly in Massachusetts. Elliot Winer, chief economist at the state Division of Employment and Training, stressed that the number of jobs and unemployment estimates can experience wide swings from month to month, and must be viewed in the context of longer trends. Recently, the trend has pointed to an improving economy. For example, he said, the hard hit manufacturing sector shed 500 jobs in December, but has nonetheless added 1,000 net jobs since July.

"The past three or four months have shown real signs of stabilization," Winer said. "The new numbers are disappointing, but certainly not discouraging for the longer-term outlook."

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