Conte: Massachusetts economy keeps going but for how long?

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by Frank Conte, Editor and Publisher, EastBoston.com

The Massachusetts economy keeps creating jobs. According to the Bureau of Labor Statistics, the state gained 3,200 jobs in November and the unemployment rate clocked in at 2.9 percent up ever so slightly from the revised October number of 2.8 percent but much lower than the U.S. rate of 3.7 for the same month. Since last November, the BLS estimates that Massachusetts added 66,100 jobs. Overall, this is remarkable and good news given that economists were predicting a recession during the last months of 2023. Just as impressive is the fact that the unemployment rate has remained under 3 percent for the last seven months. Both across the nation and here in Massachusetts, the economy is creating jobs.

Most of the state’s sector’s showed month-over-month growth with several industries grinding through slight downturns and even those industries look better when one takes the longer view.Leisure and Hospitality gained 2,800 jobs over-the-month. Over-the-year, 8,200 were added in this key sector that includes dining, tourism, and entertainment. Financial Activities – which includes finance, real estate, and insurance – gained 1,500 jobs over-the-month; over-the-year, 3,800 were added. Education and Health Services lost 200 jobs over-the-month but what’s key is that over the past year 28,300 were added. Trade, Transportation, and Utilities lost 1,000 jobs over-the-month yet, 6,300 were added since last November. The key Professional, Scientific, and Business Services sector – where most of the state’s competitive advantage resides — lost 1,400 jobs over-the-month nonetheless over-the-year, 6,200 were added. Only two sectors faced losses since last November: Information (down 2,200) and manufacturing which makes up a small percentage of the state’s workforce (down 300). Some sectors such as construction which lost jobs month over month still showed decent growth year over year. Since last November, the construction industry added 9,000 jobs.

East Boston
Window drawing at the East Boston Branch of the Boston Public Library, Bremen Street, East Boston, November 2023. Photo by Frank Conte for EastBoston.com.

The most striking statistic, however, emerges out of the context of the pandemic. Employment is currently at 3,786,200 jobs. To put a fine point on it, Massachusetts gained 724,600 jobs since the employment low in April 2020, as the Covid-19 pandemic began accelerating. This certainly is encouraging and a counterweight to some of the long-term challenges.

Economists place more importance on a state’s labor force participation rate rather than just solely on the headline unemployment rate. That is because the LFP is a better measure of the economic well-being. For example, the LFP counts discouraged workers while the unemployment rate does not. From October to November the LFP rate for Massachusetts increased by 0.1 percentage point at 64.6 percent. Compared to November 2022, the labor force participation rate was down 0.2 percentage points, a trend due to the aging of the state’s workforce that can be met with the right employment and housing policies going forward. However, the state’s LFP rate remains higher than the national rate of 62.8 percent. According to Massachusetts Benchmarks, “This is largely due to the state’s well-educated labor force, the relatively high rates of female labor force participation, and the state’s strengths in knowledge-based sectors. Well-educated workers in knowledge sectors tend to participate at higher rates and delay retirement more than less-educated workers in other sectors.” It is always difficult to predict the future weighed down as it is with uncertainty. The question remains how long can Massachusetts sustain above national rates of growth in employment and its gross domestic product? One thing is certain, other states will compete for jobs and talent. It’s something both the Governor and the state legislature should not overlook.

A version of this article appeared as an unsigned editorial in the Wakefield Daily Item on December 27, 2023 and was composed by Frank Conte publisher of EastBoston.com.