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

Research Note on the December 2017 Massachusetts Employment Situation

December 2017 Report: U-Rate: 3.5%; Jobs: 63,000 YoY 

OVERVIEW

•  According to the Executive Office of Labor and Workforce Development, the state’s total unemployment rate dropped to 3.5 percent in December from 3.6 percent in November.
• The state lost 500 jobs in the month.
• The state's labor force participation decreased one-tenth of a percentage point to 65.3 percent over the month. Compared to December 2016, the LFP rate over the year has increased by 0.7 percentage point.
• Construction gained 1,600 (+1.0%) jobs over the month and Manufacturing added 800 (+0.3%) jobs; Leisure and Hospitality gained 500 jobs (+0.1%); Financial Activities added 400 (+0.2%) jobs. 
• Professional, Scientific and Business Services lost 1,000 (-0.2%) while Education and Health Services lost 1,000 (-0.1%)  
• Other Services lost 200 (-0.1%) jobs over the month; Trade, Transportation and Utilities lost 500 (-0.1%) and Information lost 700 (-0.8%) and Government lost 100 jobs. 
• The November jobs number was revised from the originally reported 6,700 to 7,800 jobs. 

ANALYSIS

The December unemployment rate was six-tenths of a percentage point lower than the national rate of 4.1 percent reported by the Bureau of Labor Statistics. The largest private sector percentage job gains over the year were in Construction, Manufacturing, Financial Activities and Leisure and Hospitality. 

“While much of these [year over year] job gains continue to be in sectors like Professional, Business, and Scientific Services, Manufacturing posted a preliminary 2,800 over the year job gain, the first over the year over job gain in that sector in 18 years," Labor and Workforce Development Secretary Rosalin Acosta said in yesterday's statement. 

Over the last decade, Manufacturing has lost 43,100 jobs. (See table.) However, if we were to rank wages in the sectors with employment growth sectors such as Management and Professional Services, we find that manufacturing wages would rank 3rd (with $1,625 per week) and significantly higher than the private sector average of $1,273.   

The state’s high-tech manufacturing may account for the high wages in an overall shrinking sector — highlighting how output increases with fewer workers.  Weekly wages in the management subsector are nearly double when compared to all private industries. 

Massachusetts Employment Situation: November Jobs +6,700; U-Rate: 3.6%

OVERVIEW

• According to the Executive Office of Labor and Workforce Development, the state’s total unemployment rate dropped to 3.6 percent in November from 3.7 percent in October.
• From November 2016 to November 2017, the U.S. Bureau of Labor Statistics estimates Massachusetts has added 65,200 jobs.
• In November, the Leisure and Hospitality sector lead the way in job creation by adding 4,200 jobs over the month.  
• The Education and Health Services sector the Construction sector each added 2,800 jobs.
• The Professional, Scientific and Business Services, which has gained the most jobs year over year (+19,500), gained 2,400 jobs in the past month.
• Manufacturing added 1,600 jobs while the Information, Financial Activities, Other Services and Trade Transportation and Utilities sectors lost jobs. Of the private sector categories, only the Information sector lost jobs year over year.  
• Government (Federal, state and local) which has shed 3,500 jobs since last November lost 600 jobs.
• The EOLWD noted that the state’s labor force participation rate decreased one-tenth of a percentage point to 65.4 percent over the month. However, the LFP rate increased by 0.7 percentage point since November 2016.

ANALYSIS

The state’s unemployment rate 3.6 percent continued to remain lower than the national rate (4.1 percent). “Year-to-date the jobs and labor force estimates indicate a strong and stable economy in the Commonwealth.  November also marks the 13th consecutive month of private sector job growth, " remarked Labor and Workforce Development Secretary Rosalin Acosta. 

The labor force participation rate, the share of working-age population employed and unemployed, was 65.4 percent with 63,300 residents entering the work pool.  Only 18,300 of those were unable to find work. The state’s long-suffering manufacturing sector employment picture improved in November adding 1,600 jobs which represent an increase of 2,600 year over year.  The growth is significant since the state specializes in high tech rather than mass-production manufacturing. 

The state's largest sectors Professional, Scientific and Business Services and Education and Health Services rose 3.5 percent and 2.1 percent, respectively. 

The lower-wage Leisure and Hospitality sector, however, is up 3.1 percent. Economists agree the state is at full-employment. Massachusetts. 

The number of workers ages 55 and over declined less in the Bay State than the nation. In other words, the demographic drag is offset by the number of older workers who are postponing retirement. Perhaps due to seasonality, the Other Services sector lost 1,900 jobs in the month but is up 3,900 since last November. 

A look at the MA jobs picture for October 2017

Source: Executive Office of Labor and Workforce Development, Author's calculations.

Today's Massachusetts jobs number: 4.3% U-rate; 200 jobs lost in July 2017

OVERVIEW

• The state’s total unemployment rate increased to 4.3 percent in July and lost 200 jobs according to the Executive Office of Labor and Workforce Development. 
• Since last July the state’s economy has added 45,200 jobs while the state’s labor force participation rate has increased by 1.5 percent. 
• The strongest job growth came in the Construction (+2,500), with Financial Activities and Education & Health Services each adding 1,300 jobs. 
• Trade, Transportation & Utilities lost 1,400 jobs over the month while Leisure and Hospitality lost 900 jobs. Information lost 300 jobs; Professional, Scientific and Business Services lost 100.
• Government lost 1,700 jobs over the month and Other Services lost 1,400 jobs.
• The new jobs estimate for June was revised to 10,900 from the 10,000 jobs reported originally.  
• Over the past year, the Health Care and Social Assistance subsector added 20,600 jobs, a sector whose year-over-year growth is nearly four times that of the growth of the Financial Activities sector. 
• On average, Massachusetts employment grew by 3,767 jobs a month since last July. 
• On average, the private sector generated 3,575 jobs monthly over the past 13 months. 

ANALYSIS 

The state’s unemployment rate, which inched up in July, has converged with the national rate at 4.3 percent. 

According to the EOLWD, the last time the state and national rates matched was April 2008 when the rate was 5.0 percent. Over the year, the state’s seasonally adjusted unemployment rate increased seven-tenths of a percentage point from 3.6 percent in July 2016. 

Meanwhile, the LFP rate increased by three-tenths of a point to 66.4 percent in July. 

The labor force decreased by 11,300 from 3,708,800 in June, says EOLWD as 11,500 fewer residents were employed and 300 more residents were unemployed.  

The unemployment rate remains at a stable low level but the state faces a skills gap. This may be reflected in the subpar growth of mid-tech jobs classified under Leisure and Hospitality and Other Services. 

“Although the unemployment rate remains low, we continue to see persistent gaps between the skill sets of available workers and the qualifications needed for in-demand jobs,” Labor and Workforce Development Secretary Rosalin Acosta said. 

Job growth in Massachusetts continues to rely on the strength of the Education and Health Care and Professional Services super-sectors, which saw gains of 21,900 and 9,500 over the past year, respectively. In related news, the most recent Boston metropolitan survey released this week by the Bureau of Labor Statistics showed job growth over the past year across all sectors except for manufacturing. 

MA Employment Situation: Urate: 4.3 percent -- 10,000 jobs added in June

OVERVIEW

• The state’s total unemployment rate increased to 4.3 percent in June from the May rate of 4.2 percent according to the Executive Office of Labor and Workforce Development.
• Preliminary estimates suggest that Massachusetts added 10,000 jobs in June.  Since last June the economy has added 65,900 jobs.
• The labor force participation rate (LFP) remained at 66.7 percent over the month; however, this represents a 1.8 percent increase from June 2016.
• Education and Health Services added 6,700 jobs over the month. Over the year, Education and Health Services gained 28,200 jobs.
• Information added 200 jobs over the month; over the year, this sector gained 1,300 jobs.
• Federal, state and local government combined gained 400 jobs (5,500 over the past 12 months).
• Professional, Scientific, Business Service subsector lost 2,200 jobs bringing year over year to 13,900.
• Construction lost 2,800 jobs in June but since last year the sector has added 1,800 jobs.
• In June, the manufacturing sector gained 500 jobs but posted a 12-month loss of 1,400 jobs.
• The May estimate was revised with a gain of 2,000 jobs as opposed to the 2,900 originally reported.

ANALYSIS

 "During the first six months of 2017, Massachusetts has experienced the largest increase in the labor force on record, and the 66.7 labor force participation rate is now 3.9 points higher than the U.S. rate. These marked labor force gains should help ease labor market pressures and are signs of a growing economy in the Commonwealth," Labor and Workforce Development Secretary Rosalin Acosta said upon yesterday’s release. 

The increase in the unemployment rate is due to the fact more workers are rejoining the labor force. The LWD office says that 121,400 workers re-entered the market from June 2016.  Only construction and professional services lost jobs over the month. But all other sectors posted strong growth with education and health services leading the way. 

Government continues to grow employment rising by 1.2 percent over the past year.  

The growth in Massachusetts jobs should ensure that state income tax revenues grow, thus alleviating some of the sales tax revenue drift.  

The often-neglected “Other Services” category continues to move with Professional, Scientific and Business Services as a percentage of total nonfarm employment, roughly 4 percent and 15 percent respectively. 

Both are strongly correlated. The Bureau of Labor Statistics defines “Other Services” as those jobs (except for Public Administration) that provide services such as machine repair, administering religious services, grantmaking, personal and pet care services as well as other establishments. Sector growth since the last recession has been mostly flat at 0.22 percent since 2007.

Massachusetts Benchmarks outlook, pessimistic and grounded on "wage-less job growth"

In its latest dispatch, the Editorial Board of MassBenchmarks isn't pleased with the Massachusetts economy: low worker productivity, unfilled niche jobs and near-zero wage growth. These factors will not bode well for state tax receipts say the consortium of economists. They explore some of the reasons for slow wage growth:

There is also some reason to believe that the declining pricing power of firms in some sectors of the economy has hampered their ability to raise wages. And rising health care costs are consuming resources employers might have used to raise employee wages in settings where these benefits are provided. Additionally, the aging of the workforce and the rising number of retirements have allowed some employers to replace their more experienced and more highly paid staff with younger and presumably lower-paid new staff members.

Read the entire summary here.

Massachusetts adds 3,900 jobs in April 2017 as unemployment rate ticks up to 3.9 percent

OVERVIEW

• In its preliminary estimates, the Bureau of Labor Statistics suggests that Massachusetts added 3,900 jobs in April. The job gains over the previous month (March 2017) occurred in Professional, Scientific, and Business Services; Education and Health Services; Trade, Transportation, and Utilities; Other Services; Information; and Manufacturing.
• The state’s labor force participation rate increased to 66.5 percent from 65.9 percent with an increase of 33,000 entrants into the job market.
• Government lost 1,000 jobs in April but since last year the sector has added 7,700 jobs or 1.7 percent.

ANALYSIS 

• More workers are coming off the sidelines to enter the job market. The state’s unemployment rate for April 2017 increased only because the labor force saw an increase of 33,000 workers or 1.5 percent since last year. This represents a healthier view of full employment. The unemployment rate of 3.9 percent is still lower than the national rate of 4.4 percent. Since April 2016, the Administrative & Support, Waste Management, and Remediation sector added 7,000 jobs, the percentage leader at 3.9 percent. The Health Care and Social Assistance subsector continues to grow adding 18,300 jobs — at a 3.0 percent clip. Education Services has remained flat adding zero jobs while the Arts, Entertainment and Recreation subsector lost 1,300 jobs. Local government remains a strong jobs generator with 5,800 jobs. Despite well-known struggles, the Retail sector added 4,100 since last April.

A brief analysis of last week's Massachusetts jobs report

My analysis of last week's MA Jobs Number and URate.

February Report: Massachusetts adds 10,100 jobs; U-Rate at 3.4 percent

My latest research note, on the most recent Massachusetts jobs release, can be found here.