Notes on the Massachusetts Employment Situation for June 2019: U-Rate: 3.0 %; Jobs: +9,800

OVERVIEW

• The state’s total unemployment rate for May remained at 3.0 percent according to the Executive Office of Labor and Workforce Development.  The Commonwealth reports that 9,800 jobs were added in June.  
• From June 2018 to June 2019, the Bureau of Labor Statistics estimates that Massachusetts added 35,500 jobs.  However, the Labor Force Participation rate declined one-tenth of a percentage point to 67.7.
• Over the month, the private sector added 8,400 jobs as gains occurred in Education and Health Services; Leisure and Hospitality; Financial Activities; Manufacturing; Information and Trade, Transportation and Utilities.  
• Professional, Scientific and Business Services added 1,000 jobs with 7,100 jobs added over the past 12 months. 
• After losing 300 jobs in May, the Education and Health Services sector added 5,100 jobs Over the year, this sector gained 21,500 jobs.
• Manufacturing gained 300 jobs in June but has lost 1,600 jobs over the year. 
• The Construction sector lost 900 jobs and has lost 3,400 over the year. 
• Trade, Transportation and Utilities added 100 jobs Over the year, the sector lost 800 jobs.
• Financial Activities gained 1,300 jobs while Information added 200 jobs in June; year over year, the sectors gained 1,300 and 1,700 jobs, respectively. 
• Government added 1,400 jobs in June. Over the past 12 months this sector has gained 4,200 jobs.
• The 3.0 percent rate in Massachusetts is seven-tenths of a point lower than the national rate of 3.7 percent.
• According to the BLS, Vermont enjoyed the lowest unemployment rate in the nation. (See Table A.)

ANALYSIS

Following a loss of jobs in May, Massachusetts bounced back with the addition of 9,800 jobs in June. 

"BLS estimates there are now 3,682,400 jobs in the Commonwealth, Labor and Workforce Development Secretary Rosalin Acosta said. "Job gains both over the month and over the year continue to be led by the Education and Health services sector which added 21,500 jobs and has grown by 2.7 percent over the last year."  

The figures for other sectors, however, are not so rosy. 

Over the past year the Retail, Mining and Construction, Manufacturing, Trade Transportation and Utilities and Whole Trade combined lost 10,700 jobs. 

But Education and Health Services doubled that amount for the year. Other sectors such as Leisure and Hospitality and Professional, Scientific and Business Services also contributed to strong private sector job growth.  

The combined federal, state and local government gained 4,200 jobs over the year (although state government lost 900 jobs during that period). Government employment in Massachusetts has been remarkably stable even through the Great Recession (See Chart A). 

Meanwhile,wages in the sector are rising with state government weekly wages nearly matching overall average for all workers (See Chart B). 

Pay for federal work is also growing. In January 2006 a federal worker in the Bay State earned $1,224; in December 2018 he an earned $1,712 average wage. During the same period, the average weekly wage for Massachusetts worker rang in at $1,046 and rose to $1,457 by the end of 2018. 

Chart A:  Government Employment in Massachusetts: Federal, State & Local 2006-2019

Chart B:  Government Wages in Massachusetts: Federal, State & Local 2006-2019

Press Release: LWD: Massachusetts U-Rate for June 2019: 3.0%, Payrolls +9,800

Massachusetts Unemployment and Job Estimates for June

(BOSTON, MA -JULY 19, 2019) - The state's June total unemployment rate remained unchanged at 3.0 percent, the Executive Office of Labor and Workforce Development announced Friday. The Bureau of Labor Statistics' preliminary job estimates indicate Massachusetts added 9,800 jobs in June. Over the month, the private sector added 8,400 jobs as gains occurred in Education and Health Services; Leisure and Hospitality; Financial Activities; Manufacturing; Information and Trade, Transportation and Utilities. Government added jobs over the month. From June 2018 to June 2019, BLS estimates Massachusetts added 35,500 jobs. The June unemployment rate was seven-tenths of a percentage point lower than the national rate of 3.7 percent reported by the Bureau of Labor Statistics. "BLS estimates there are now 3,682,400 jobs in the Commonwealth, which is 287,100 jobs above the previous Massachusetts cumulative job count high from February of 2001,” Labor and Workforce Development Secretary Rosalin Acosta said. “Job gains both over the month and over the year continue to be led by the Education and Health services sector which has added 21,500 jobs and grown by 2.7 percent over the last year.” The labor force decreased by 2,100 from 3,840,900 in May, as 1,700 fewer residents were employed and 500 fewer residents were unemployed over the month. Over the year, the state's seasonally adjusted unemployment rate dropped four-tenths of a percentage point. The state's labor force participation rate - the total number of residents 16 or older who worked or were unemployed and actively sought work in the last four weeks - dropped one-tenth of a percentage point at 67.7 percent over the month. Compared to June 2018, the labor force participation rate is unchanged. The largest private sector percentage job gains over the year were in Education and Health Services; Information; Leisure and Hospitality; and Other Services. June 2019 Employment Overview Education and Health Services added 5,100 (+0.6%) jobs over the month. Over the year, Education and Health Services gained 21,500 (+2.7%) jobs. Leisure and Hospitality gained 3,100 (+0.8%) jobs over the month. Over the year, Leisure and Hospitality added 5,700 (+1.5) jobs. Financial Activities gained 1,300 (+0.6%) jobs over the month. Over the year, Financial Activities added 1,300 (+0.6%) jobs. Manufacturing gained 300 (+0.1%) jobs over the month. Over the year, Manufacturing lost 1,600 (-0.7%) jobs. Information added 200 (+0.2%) jobs over the month. Over the year, Information gained 1,700 (+1.9%) jobs. Trade, Transportation and Utilities added 100 (0.0%) jobs over the month. Over the year, Trade, Transportation and Utilities lost 800 (-0.1%) jobs. Construction lost 900 (-0.6%) jobs over the month. Over the year, Construction has lost 3,400 (-2.1%) jobs. Professional, Scientific and Business Services lost 400 (-0.1%) jobs over the month. Over the year, Professional, Scientific and Business Services gained 4,900 (+0.8%) jobs. Other Services lost 400 (-0.3%) jobs over the month. Over the year, Other Services are up 2,000 (+1.4%) jobs. Government added 1,400 (+0.3%) jobs over the month. Over the year, Government gained 4,200 (+0.9%) jobs. Labor Force Overview The June estimates show 3,725,300 Massachusetts residents were employed and 113,500 were unemployed, for a total labor force of 3,838,800. The unemployment rate remained at 3.0 percent. The June labor force decreased by 2,100 as 1,700 fewer residents were employed and 500 fewer residents were unemployed over the month. The labor force participation rate, the share of working age population employed and unemployed, dropped one-tenth of a percentage point at 67.7 percent. The labor force was up 30,900 from the 3,807,900 June 2018 estimate, with 47,500 more residents employed and 16,600 fewer residents unemployed. The unemployment rate is based on a monthly sample of households. The job estimates are derived from a monthly sample survey of employers. As a result, the two statistics may exhibit different monthly trends. NOTES: The labor force is the sum of the numbers of employed residents and those unemployed, that is residents not working but actively seeking work in the last four weeks. Estimates may not add up to the total labor force due to rounding. Local area unemployment statistics for June 2019 will be released on Tuesday, July 23, 2019. The preliminary July 2019 and revised June 2019 unemployment rate, labor force and job estimates for Massachusetts will be released on Friday, August 16, 2019. See the 2019 Media Advisory annual schedule for a complete list of release dates. Detailed labor market information is available at www.mass.gov/lmi. Source: Charles Pearce  617-626-7121 Charles.Pearce@massmail.state.ma.us Follow us on Twitter @MassLWD

Highly Recommended: "Commanding Nature by Obeying Her; A Review Essay on Joel Mokyr's Culture of Growth"

From NBER Working Paper 26061: Enrico Spolaore: Commanding Nature by Obeying Her; A Review Essay on Joel Mokyr's Culture of Growth

Abstract:

Why is modern society capable of cumulative innovation? In A Culture of Growth: The Origins of the Modern Economy, Joel Mokyr persuasively argues that sustained technological progress stemmed from a change in cultural beliefs. The change occurred gradually during the seventeenth and eighteenth century and was fostered by an intellectual elite that formed a transnational community and adopted new attitudes toward the creation and diffusion of knowledge, setting the foundation for the ethos of modern science. The book is a significant contribution to the growing literature that links culture and economics. This review discusses Mokyr’s historical analysis in relation to the following questions: What is culture and how should we use it in economics? How can culture explain modern economic growth? Will the culture of growth that caused modern prosperity persist in the future?

This essay is highly recommended. Link here. 

New NBER Working Paper: Improving the accuracy of economic measurement with multiple data sources: The case of payroll employment data

A new NBER Working Paper, "Improving the accuracy of economic measurement with multiple data sources: The case of payroll employment data," by Cajner, Crane, Decker, Hamins-Puertolas, and Kurz.

Abstract:

This paper combines information from two sources of U.S. private payroll employment to increase the accuracy of real-time measurement of the labor market. The sources are the Current Employment Statistics (CES) from BLS and microdata from the payroll processing firm ADP. We briefly describe the ADP-derived data series, compare it to the BLS data, and describe an exercise that benchmarks the data series to an employment census. The CES and the ADP employment data are each derived from roughly equal-sized samples. We argue that combining CES and ADP data series reduces the measurement error inherent in both data sources. In particular, we infer “true” unobserved payroll employment growth using a state-space model and find that the optimal predictor of the unobserved state puts approximately equal weight on theCES and ADP-derived series. Moreover, the estimated state contains information about future readings of payroll employment.

Available at NBER. 

Notes on the U.S. Employment Situation for June 2019: U-rate 3.7%, Jobs +224,000

OVERVIEW

• Total non-farm payroll employment increased by 224,000 and the unemployment rate rose to 3.7 percent, according to the Bureau of Labor Statistics.  
• The Labor Force Participation (LFP) rate remained at 62.9 percent the same rate from one year ago. The Employment-Population ratio also remained at 60.6 percent. 
• Professional and Business Services (+51,000) and Health Care (+35,000) led all sectors in May.  Construction added 21,000 jobs. Manufacturing added 17,000 jobs.
• Employment in other industries did not change from May to June. Mining, Wholesale Trade, Retail Trade, Information, Financial Activities, Leisure and Hospitality and Government changed little. 
• Average hourly earnings rose by 6 cents to $27.90. Since June 2018 wages are up 3.1 percent. 
• In June, the average workweek for all employees remained at 34.4 hours.  
• The number of persons employed part-time was unchanged in June (4.3 million). The number of long-termed unemployed (greater than 27 weeks) remained unchanged at 1.4 million and accounted for 23.7 percent of all unemployed. 
• In June 1.6 million persons were not in the workforce but wanted and were available for work and sought employment in the last year. This group known as “workers marginally attached to the labor force” was unchanged since last year. BLS reports that 1.1 million of this group had not searched for work “for reasons such as school attendance or family responsibilities.” 
• Revisions to the two previous months counted 11,000 less jobs than reported initially. April 2019 was revised from 224,000 to 216,000 while May 2019 was revised from 75,000 to 72,000. 

ANALYSIS

After a weak May payrolls report (+72,000) the U.S. jobs machine roared back with 224,000 new jobs in June. 

Professional and Business Services, Health Care and Transportation and Warehousing sectors lead June’s growth. 

Overall, the jobs machine is clearly slowing down. Employment growth, according to the BLS, has averaged 172,000 this calendar year compared with an average of 223,000 in 2018. 

However, today’s BLS report shattered expectations;  Wall Street expected a gain of 160,000 new jobs. While slower than one year ago, the private sector culled 191,000 new jobs. The parallel measure, the ADP National Employment Report, earlier this week projected a gain of 106,000 private jobs.  

With the BLS revisions, the three-month average for U.S. job growth rang in at 171,000. 

Despite uncertainty about international trade, the U.S. Manufacturing sector is holding its own. The Manufacturing sector added 17,000 jobs in June; while little changed over the past four months, manufacturing is growing albeit slowly. Thus far the sector has averaged 8,000 per month, compared with 22,000 last year. 

The trade-tariff impasse is not diminishing growth in the sector. While the manufacturing sector employs approximately 120,000 less workers than it did before the Great Recession, average hourly wages are rising steadily. (See Figure A.)  

Unemployment in the manufacturing sector declined from June 2018 to June 2019, from 3.1 percent to 2.8 percent. For most part, manufacturing attracts workers on the lower end of educational attainment, but wages are good entry point to the middle class. These workers have also fared well overall in the economy. Unemployment for those with less than a high school degree was 5.8 percent in May. Workers with a high school diploma and no college and some college faced unemployment rates of 3.9 percent and 3.0 percent, respectively. 

Figure A:  Employment and Average Hourly Wages in the U.S. Manufacturing Sector

Notes on the May 2019 Massachusetts Employment Situation: U-Rate: 3.0 %; Jobs: -3,600

OVERVIEW

• The state’s total unemployment rate for May increased to 3.0 percent according to the Executive Office of Labor and Workforce Development.  
• From May 2018 to May 2019, the Bureau of Labor Statistics estimates that Massachusetts added 26,700 jobs.  
• Professional, Scientific and Business Services added 1,000 jobs with 7,100 jobs added over the past 12 months. 
• Education and Health Services lost 300 jobs over the month. Over the year, this sector gained 14,300 jobs
• Manufacturing gained 100 jobs in May and has lost 1,800 jobs over the year. 
• The Construction sector lost 2,300 jobs and has lost 700 over the year. 
• Trade, Transportation and Utilities lost 2,300 jobs over the month. Over the year, the sector lost 600 jobs.
• Financial Activities lost 100 while Information added 300 jobs in May. 
• Growth in the Other Services sector remained unchanged but is up 2,300 over the year. 
• Government added 400 jobs in May. Over the past 12 months this sector has gained 4,900 jobs.
• The 3.0 percent rate in Massachusetts is six-tenths of a point lower than the national rate of 3.6 percent.
• According to the Bureau of Labor Statistics, unemployment rates were lower in 6 states, higher in 2 states, and stable in 42 states and the District of Columbia in May. Nonfarm payroll employment increased in Washington state and was essentially unchanged in 49 states and in D.C. 

ANALYSIS

Until last month, December 2016 was the last time the unemployment rate in Massachusetts ticked up by one-tenth of a point. In May 2019, the state’s rate ticked up to 3.0 percent.  The state’s economy is still at full employment.  

“Massachusetts continues to experience a strong economy with a low unemployment rate of 3.0 percent and over 60,000 more employed residents and 17,500 fewer unemployed residents in the last year. Also, the Commonwealth’s labor force participation rate remains at a near 15-year high and is 5 points above the US rate,” Labor and Workforce Development Secretary Rosalin Acosta said.  

The state’s labor force totals 3.84 million representing a 67.8 percent labor force participation rate. 

Manufacturing gained 100 jobs over the month, but the sector is still losing jobs since last year (1,800). Trade, Transportation and Utilities lost 2,300 jobs and Education and Health Services lost 300 jobs. However, Government added 400 jobs, part of the 4,200 jobs it gained year over year. 

Since the end of the Great Recession in June 2009, the state’s unemployment rate has dropped significantly from 8.1 percent. During the recovery, the Massachusetts unemployment rate increased by no more than 0.1 percent six times. That means the rate has dropped or remained unchanged for 109 of the 120 months that mark the recession (see Chart A). 

Chart A.

Massachusetts enjoys the 12th best unemployment rate in the U.S. (See Table A.) Two other New England states are atop the nation: Vermont has the lowest unemployment rate at 2.1 percent while New Hampshire registers third in the nation with its 2.4 percent rate.  

Table A: New England Unemployment Rates

Source: Bureau of Labor Statistics

The BLS updated the state’s county employment picture with April 2019 data.  Middlesex and Hampshire counties enjoyed the lowest unemployment rates. More than half of the counties — 8 of 14— recorded rates lower than the statewide rate of 3.0 percent for April 2019 (See Table B).

Table B: County Unemployment Rates

Democrats Would Resolve the Question of Whether Illegal Immigrants Burden Society

Merrill Matthews: Democrats Would Resolve the Question of Whether Illegal Immigrants Burden Society

Like most economists, we think legal immigrants can be a huge benefit to the economy—because historically most immigrants, whether legal or otherwise, came here to work.