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Massachusetts Hits 13-Year Job High. Is the Economy Back?

Posted by Andre Mayer on Apr 25, 2014 9:00:00 AM

The Massachusetts employment report for March, released last week, marked a milestone for our economy – total employment statewide edged past its previous high, attained more than 13 years ago in February 2001. But although total employment today is almost exactly what it was then (3,396,400 compared to 3,391,200, seasonally adjusted) the distribution of these jobs has changed considerably.

Massachusetts employmentDespite the new employment record, many broad sectors of the economy are down from 2001. These include Manufacturing (-39%), Information (-22%), Financial Activities (-11%), Construction (-11%), and Trade, Transportation & Utilities (-6%).

 Different factors are at work in the various sectors. Manufacturing, the principal source of productivity growth, has been shedding jobs for three decades while maintaining and increasing its output. Finance and utilities have undergone significant restructuring and consolidation. The Information sector was hammered in the "dot-com bust," and Construction suffered badly in the more recent recession.

Offsetting these losses were employment gains in Education & Health Services (+34%), Leisure & Hospitality (+20%), Other Services (+11%) and Professional, Scientific and Business Services (+2%). In Education & Health Services, 90 percent of the gain was on the health side (+39%). In Professional, Scientific and Business Services, all of the increase was in Professional, Scientific, Technical Services, while management and support functions gave ground. What the sectors on the positive side have in common is reliance on increased staffing to generate growth – although efficiency may improve, personal services and billable hours are key measures of output.

Government employment is almost exactly what it was 13 years ago (-0.2%), with a significant drop in federal jobs almost offset by small gains at the state and local levels. These numbers include public services in education and health – fields in which the private sector has added jobs.

Has Massachusetts finally achieved recovery, not only from the last recession but also from the one before that? The employment totals may say we have, but there is other evidence – some of it from the same employment report. The unemployment rate in February 2001 was 3.0 percent (it had already begun to tick up). At the inter-recession employment peak in April 2008, the rate was 4.8 percent. In March 2014, despite recent improvement, it stands at 6.3 percent. Employers and job-seekers know that we aren't all the way back yet.

Topics: Massachusetts economy, Jobs, Unemployment

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