The November 2018 Employment Situation in Massachusetts

U-Rate: 3.4%; +4,600; +60,500 YoY

OVERVIEW

• According to the Executive Office of Labor and Workforce Development, the state’s total unemployment rate dropped one-tenth of a percentage point to 3.4 percent in November.
• According to the federal Bureau of Labor Statistics, the state added 4,600 jobs in November. 
• he state’s unemployment rate was three-tenths of a percentage point lower than the national average of 3.7 percent. 
• The state’s Labor Force Participation Rate (LFP) remained at 68.0 percent. Since November 2017, the LFP rate by 2.7 percentage points.
• Trade, Transportation and Utilities added 3,100 over the month and Professional, Scientific and Business Services added 1,700 with Education and Health Services adding 1,200.
• Financial Activities lost 700 jobs over the month with Construction (-500), Other Services (-300) and Manufacturing (-100) also losing jobs in November. 
• Two sectors remained unchanged over the month: Government and Leisure and Hospitality.

ANALYSIS
Since January the Massachusetts monthly unemployment rate averaged 3.5 percent. The state continues to enjoy an unemployment rate less than the national rate. 

The jobs economy is driven mostly by the state’s Professional, Scientific and Business Services sector, which created 27,600 jobs since last November. However, the Leisure and Hospitality sector shed 800 jobs since that time. Financial Activities only added 700 jobs. Government has lost jobs. 

Education and Health Services comprise the largest sector in Massachusetts. (See table above) Over the past 12 months it has added 14,400 jobs. 

Assuming the BLS figure of 60,500 new jobs, the state created a monthly average of approximately 5,000 jobs since last November.  Northern New England is benefiting from low unemployment rates. 

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U.S. Employment Situation August 2018: U-Rate: 3.9%; Jobs: +201,000

OVERVIEW

• The unemployment rate remained 3.9 percent in August with payrolls expanding by 201,000 jobs, according to the Bureau of Labor Statistics.
• The Labor Force Participation (LFP) declined to 62.7 percent. The Employment-population ratio also declined in August by 0.2 to 60.3 percent. The number of unemployed for the month was 6.2 million, little changed from July. 
• Among the major groups, the unemployment rate for adult men was 3.5 and 3.6 percent, respectively. Among minority groups, unemployment was 6.3 percent (Blacks), 3.0 percent (Asians) and 4.7 percent (Hispanics). 
• In August, employment grew in the Wholesale trade, Health care, Professional services, Transportation and warehousing, and Mining.
• Professional and business services added 53,000 jobs. 
• Wholesale trade added 22,000 jobs while Health care added 33,000. Wholesale trade benefited from the growth in durable good wholesale subsector while health care benefited from gains in the ambulatory and hospital subsectors.
• Manufacturing changed little in August. 
• Month over month, employment in the other major sectors—Retail trade, Financial activities, Leisure and hospitality—changed little. 
• Over the year, average hourly earnings have increased by 77 cents or 2.9 percent. In August the average hourly private nonfarm wage rang in at $27.16.
• The average workweek for all employees was unchanged at 34.5 hours. 
• The number of persons employed part-time for economic reasons changed little over the month but was down by 830,000 over the year.

ANALYSIS

Job growth continued into August with 201,000 payroll jobs added. The consensus estimate centered around 191,000, according to CNBC. 

Employment growth in August fell in line with the average monthly growth of 196,000 for the past 12 months. 

The BLS reported that 204,000 private sector jobs were created during the month. Earlier in the week, ADP reported an increase of 163,000 nonfarm private sector jobs for August.  Hindsight took some —but not much— enthusiasm out of previous two monthly payrolls reports.  The BLS revised the payroll number for June 2018 to 208,000 from 248,000 and did the same for July 2018 — revising that month’s number to 147,000 from the 157,000 previously reported. 

Examining five years of August data, economists expect the month’s numbers to be revised upward. The new numbers show the three-month average showed up at the rate of 185,000 jobs. The number of long-term unemployed (for more than 27 weeks or more) was little changed in August although over the past year the number had declined by 403,000. This group accounted for 21.5 percent of U.S. unemployment. 

The energy sector, after a near two-year slump, generated 104,000 jobs “almost entirely in support activity for mining.”  

Manufacturing is at a sweet spot, while employment changed little in this sector, employment was up by 254,000 with more than three fourths coming the durable goods segment. 

The latest jobs and wages reports provide little ammunition for doves at the Federal Reserve Bank. There are no reasons to keep interest rates low. The Fed wanted to see growth in wages before hiking and its clear wages are moving in the right direction. 

The economy is at a peak. Business confidence is up and supported by consumer optimism. “Today’s strong economy is finally translating into wage gains for more workers,” Andrew Chamberlain, chief economist of the labor-market research firm Glassdoor told MarketWatch.

Massachusetts Employment Situation: 3.5% URate with +21,400 new jobs

OVERVIEW

• The state’s unemployment rate remained at 3.5 percent in June according to the federal Bureau of Labor Statistics.  
• Massachusetts added 63,200 jobs since June 2017 with the state’s unemployment rate decreasing three-tenths of a percentage point from 3.8 percent in June 2017. 
• The state’s unemployment rate was five-tenths of a percentage point lower than the national rate of 4.0.
• The leisure and hospitality sector added 6,600 jobs.
• The largest private sector percentage gains over the year were in the construction, professional and other services.
• Professional, scientific and business services sector added 4,700 jobs while Other Services gained 2,500 jobs
• Construction added 2,300 jobs while manufacturing added 1,700 jobs. 
• The information and financial activities sectors lost jobs over the month, 300 and 400 jobs respectively.
• Education and health services gained 1,000 jobs while trade, transportation and utilities remained unchanged.
• Government added 3,200 jobs but over the past year the level remained flat.

ANALYSIS

Sidelined workers in the Bay State are returning to the job market. At 66.9 percent, the state’s labor force participation rate is up 1.3 percent over June 2017. “Over the last year, over 100,000 more Massachusetts residents have become employed in the Commonwealth, helping to push our labor force participation rate to its highest level in 10 years - a full four percentage points higher than the national average.” Labor and Workforce Development Secretary Rosalin Acosta said today. 

To match the lowest unemployment in recent decades (the 2.7 annual rate for the Year 2000), how many jobs would the state have to create at a LFP rate that increases by just another half of one percent? 

According to the Federal Reserve Bank of Atlanta’s Jobs Calculator, the Bay State needs to create a monthly average of 7,463 jobs over the next 12 months at the same time increasing its LFP to 67.4 percent. 

Whether an economy already at full employment can achieve such a goal is uncertain, yet there may be some room to grow if the economy exceeds expectations. 

Meanwhile, manufacturing jobs still comprise a small share of Massachusetts total employment at 6.8 percent remaining above trend. However, the Wall Street Journal today reported that there are  no longer any “manufacturing-intensive” counties in Massachusetts defined by a threshold whereby 25 percent of a state’s workforce is employed making things.

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