By Kyle Cheney
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, MARCH 8, 2012…..Massachusetts employers added nearly 30,000 fewer jobs in 2011 than previously reported, according to revised data released by the Patrick administration Thursday.
The new numbers reflect weak job growth during 2011, with employers adding about 1,000 jobs per month -237,500 individuals were categorized as unemployed in Massachusetts in January.
“This is certainly a cold shower,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation. “If you look back at the economic recoveries of earlier times, this is a pale shadow of those.”
Most of the year-over-year job gains came in January, when employers reported adding 6,600 workers to their rolls. The state’s unemployment rate was 6.9 percent in January. December’s initially reported 6.8 percent jobless rate was revised up to 6.9 percent.
Just over a month ago, state labor officials were touting the addition of 40,700 jobs in 2011. But due to a revised methodology that updated the previous year’s totals, the earlier numbers overestimated job creation nearly fourfold, according to numbers released by the Executive Office of Labor and Workforce Development. From January 2011 to January 2012, employers added just 12,200 jobs, the state reported.
The news that Massachusetts employers may have added jobs at less than a quarter of the level previously reported comes as legislative leaders say they’re just beginning to explore a job-creation package, despite promising 14 months ago, at the outset of the two-year session, that job creation was their top priority.
Administration officials contended the jobs numbers they released Thursday belie actual economic progress. Speaking to reporters, Gov. Deval Patrick said the statistics have been “all over the place” but said his on-the-ground interaction with business owners told a different story, and he rejected the notion that the state has been experiencing a jobless recovery.
“I’m out visiting companies every day. I see the new positions. I see the new hires. I’m excited about that, and I’m confident that the strategy we’ve been pursuing of investing in education and in innovation and in infrastructure is a winning strategy,” he said.
“These numbers have been all over the place. The unemployment rate has been all over the place and is going down. I meet the people who’ve got those new jobs, who are planning for those new jobs, who are expanding job opportunities here in the commonwealth because we’re creating an environment where that’s desirable, so the strategy’s a winning strategy.”
To underscore his point, administration officials told the News Service that Patrick planned later in the day to visit Peter and Nicole Nyberg, co-owners of Hearth Wood Fired Bread, a Plymouth bakery that plans to add new jobs, in part thanks to a $150,000 loan from the state. They also pointed to a series of personal visits by the governor last fall to companies adding jobs in Boston, Westfield and Ipswich.
Patrick administration officials also cast doubt on the revised figures, blaming the federal Bureau of Labor Statistics – which compiles the data – for applying an imprecise methodology that underreported the number of jobs the state actually added last year.
“What I would say is that we believe that the numbers are actually higher than the Bureau of Labor Statistics is currently reporting,” Joanne Goldstein, secretary of labor and workforce development, said in a phone interview. “We have internal data that is not included in this, which demonstrates a greater job gain than reported.”
Goldstein also said that the revised numbers don’t hamper Gov. Deval Patrick’s running narrative – that the state is recovering from recession faster and stronger than the rest of the country.
“If you look at the other economic indicators, we think they demonstrate quite clearly that Massachusetts is in fact doing very well. All of the things that are important to Massachusetts are happening,” she said.
Goldstein pointed to strong January job growth in the professional, scientific and business services sector, which includes “innovation” industries like technology and life sciences, key industries that the Patrick administration has been working to lure to Massachusetts. Exports, she said, have returned to their 2008 level.
“CNBC continues to rank us the 6th best state to do business with, up from the bottom third during the Romney administration,” she added, dinging Patrick’s predecessor and the frontrunner from the Republican presidential nomination. She also noted that Associated Industries of Massachusetts recently reported an increase in business confidence and the Department of Revenue reported higher-than-anticipated income tax collections, “a reflection that we do have more jobs.”
Jim Sibley, chief of the Boston branch of the Bureau of Labor Statistics, defended the agency’s methodology, describing a detailed, complex formula that officials use to estimate job levels and the unemployment rate. He said the bureau’s new methodology is meant to eliminate “noise” and “sampling error” that results when extrapolating jobs data.
Patrick’s economic development secretary, Gregory Bialecki, said jobs numbers are just “one data point” when evaluating the state’s economic progress.
“I think the numbers as we see them are still reflecting that there’s growth in the economy and job growth as well. I think to us, one of the important factors is steady progress,” he said. “We’re seeing Europe now. We thought they were out of the woods, and it looks like Europe may be coming back into a recession, and the world is still a tough place. The most important piece of news is we’re continuing to – there’s no question with these revised numbers – we’re showing that we’re moving in an unambiguously positive direction. We’re not slipping backwards.”
Widmer agreed that the state economy is showing “more positive than negative signs at this point” but said the revised jobs numbers indicate a precarious recovery.
“In the end, we’re tied to the national economy. We could grow a little faster or a little slower, but we’re not either going to outpace or trail the national economy by a lot,” he said. “I think the revision shows just how fragile all of this is.”
In January, employment gains were largely driven by an 8,300-job increase in professional, scientific and technical services, with smaller gains reported in trade, transportation and utilities, leisure and hospitality, construction, information and financial activities sectors. The gains were partly offset by a 1,600-job loss in education and health services, a 400-job loss in manufacturing and a 1,300-job loss in government jobs, largely driven by a decline in state workers.
A separate Bureau of Labor Statistics survey released by the Patrick administration indicated that 237,500 workers were unemployed in January, with 3.2 million Massachusetts residents holding jobs. The state’s unemployment rate peaked in October 2009 at 8.7 percent, and today, at 6.9 percent, it sits well below the national rate of 8.3 percent.
Boston-area business leaders evidenced glimmers of hope about a recovering local economy. At a Greater Boston Chamber of Commerce breakfast Thursday morning, co-hosted by Sovereign Bank, 83 percent of business leaders on hand said they anticipated an improvement in the Hub’s economy in 2012.