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Massachusetts job growth flat in August

Data indicate national unease starting to weigh more on local economy

By Todd Wallack
Globe Staff / September 16, 2011

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Massachusetts employers cut jobs for the first time in three months in August, a sign that the state economy is slowing along with the struggling US economy.

Companies cut nearly 9,000 jobs last month, following strong gains in July and June, the state Executive Office of Labor and Workforce Development reported yesterday, based on a survey of companies. The unemployment rate fell to 7.4 percent - the lowest since February 2009.

The state sometimes reports conflicting jobs and unemployment figures - especially when job growth is modest or nonexistent - because they are based on two separate surveys. The unemployment figures are drawn from a survey of households, while payroll figures are based on reports from employers.

“The numbers are pointing in different directions,’’ said Andre Mayer, vice president for research at Associated Industries of Massachusetts, a business trade group. “It’s telling us right now we’re kind of dead in the water. We’re not in terrible shape, but there isn’t any job growth.’’

Overall, the state has added more than 40,000 jobs this year as the state’s economy expanded faster than the nation as a whole. Unemployment here remains well below the 9.1 percent national rate.

But the state is feeling the impact of events seen as hurting the US economy, including the debt crisis in Europe, gyrating stock markets, and political gridlock in Washington, said Alan Clayton-Matthews, an economics professor at Northeastern University. Problems with the housing market and tepid consumer spending have also contributed.

“It’s no wonder that businesses and consumers are not feeling confident, and that affects real economic activity,’’ he said.

A survey by AIM earlier this month found that the outlook among Bay State businesses has become pessimistic, with companies saying they expect a slowdown in hiring later this year.

Both state and national political leaders are trying to find ways to boost hiring. Yesterday, Governor Deval Patrick said Massachusetts will receive $22 million in federal funds to lend to small businesses. Patrick made the announcement while visiting Thinking Phone Networks, a Cambridge firm that plans to use a $1 million state loan to expand.

“This critical assistance is a game changer, and can be the deciding factor between a small business choosing to forge ahead with an expansion or being forced to sit on the sidelines,’’ Patrick said in a statement.

Meanwhile, President Obama has been trying to win support for his $450 billion plan to restart the economy, in part by temporarily cutting payroll taxes for individuals, providing tax credits to companies that hire, and setting aside money for construction projects.

In Massachusetts, officials attributed most of August’s job losses - about 6,000 - to a strike in the information sector, which includes telecommunications. About 45,000 workers in the Northeast went on strike against Verizon Communications Inc., and were not counted on payrolls last month. The Verizon employees have since returned to work.

The state reported that most industries lost jobs last month, including health care, government; professional and business services; financial services; and manufacturing.

Some of the biggest losses occurred in the leisure and hospitality sector, which includes many tourism-related jobs and accounted for a decline of 2,100 positions. However, Clayton-Matthews said those losses could be misleading because it’s difficult to seasonally adjust those figures.

On the bright side, trade, transportation, and utilities led gains in August, adding about 2,000 jobs. Construction had small job gains.

Todd Wallack can be reached at twallack@globe.com. Follow him on Twitter @twallack.


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