State Loses Jobs in April; Statistics Lack Consistency

Posted by Andre Mayer on May 16, 2013 2:15:00 PM

"The unemployment rate is based on a monthly sample of households," the state's Executive Office of Labor and Workforce Development reminds each month. "The job estimates are derived from a monthly sample survey of employers. As a result, the two statistics may exhibit different monthly trends."

UnemploymentThat's certainly true of the employment report for April released today.

The headline numbers, showing that Massachusetts' total unemployment rate remained unchanged at 6.4 percent and the Commonwealth lost 1,400 jobs in April, seem perfectly consistent; 1,400 jobs on a base of 3.5 million isn't enough to move the needle. But look more closely and the coherence disappears.

Where the employer survey shows a loss of 1,400 jobs last month, the household survey finds that 2,900 more residents were employed. The annual trends, however, are reversed: since last April, Massachusetts has added 46,200 jobs according to the employer survey, but just 5,000 according to the household survey.

The month-to-month variations, which are products of small sample size and similar issues, are not of great concern. We may over-react to a minor fluctuation – for example, that 1,400-job decline in the April preliminary estimates is more than offset by a concurrent revision that added 1,700 to March's total – but the timeframe is short and the numbers are small; the differences will come out in the wash. If, on the other hand, we don't know whether the state added 5,000 jobs over the past year, or 46,200, we really don't know what's going on in our economy.

The basic problem is that in fact not much is going on. For almost three years, the economy has been re-establishing stability and rebuilding strength, but not generating sustained, robust growth. The up-and-down pattern is plainly visible in the course of AIM's Business Confidence Index, which now seems stuck in the neutral range. The current consensus among economists is that the US economy will continue to grow slowly well into the third quarter before picking up late in the year.

Here in Massachusetts we are feeling negative effects from federal spending cuts and from recession in Europe (which affects us more than the nation as a whole). That we're holding our own in the face of these external forces, and perhaps even moving forward little by little, is evidence that there has been a recovery and that we still have significant competitive strengths.

Topics: Business Center, Massachusetts economy, Unemployment

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