Unemployment Rate Climbs as Mass. Loses 4,800 Jobs in August
By Matt Murphy
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, SEPT. 20, 2012…..Gov. Deval Patrick pledged to the stay the course despite a gloomy jobs report released Thursday morning showing that despite an increase in government jobs the economy shed 4,800 total jobs in August, driving the unemployment up to 6.3 percent.
“This is not going anywhere near as fast as I or anyone else would like, especially if you are one of the people still out of work, but we’re pointed in the right direction, moving in the right direction and we’re going to keep going,” Patrick said.
The jobs report prepared by the U.S. Bureau of Labor Statistics and released by the Patrick administration showed an increase in the unemployment rate for the second straight month. The August job losses also ended a streak of eight consecutive months of job gains, leaving an estimated 218,800 residents unemployed, though the unemployment rate is still well below the 8.1 percent national average.
“I’m always concerned that we have a strong economy, but I’m also very confident of the strategy that we have pursued,” Patrick said, recounting the business owners he has met with who are staring new companies and hiring.
The increase in the unemployment rate from 6.1 percent follows a revised jobs report for July showing a more modest 300 job gain after a previously reported uptick of 1,600 jobs.
“We think the economy in Massachusetts is still heading in the right direction. This is a bit of a blip but we’re continuing to do everything we can,” Labor and Workforce Development Secretary Joanne Goldstein said.
The economy has created 31,400 jobs in 2012 and private sector jobs are up 29,900, according to the report, with the largest gains for the year coming in the professional, scientific and business services field and in trade, transportation and utilities.
The disappointing jobs report comes roughly seven weeks from election day in the midst of heated campaigns for Congress and the Legislature when unemployment trends, either positive or negative, can become fuel for candidates.
House Minority Leader Brad Jones (R-North Reading) called the report “further confirmation of an out-of-touch governor,” and said the administration’s approach toward economic recovery has not been “sufficient.”
“Instead of trying to unleash Massachusetts’ potential so the close to 219,000 unemployed or underemployed residents can get back to work, Governor Patrick is traipsing around the country playing chief surrogate for a President who doesn’t have a much better record of job creation or growth to run on himself,” Jones said in a statement.
Professional, scientific and business services lost 1,900 jobs in August, the first decline in the sector since June 2011. Trade, transportation, utilities also shed 1,400 jobs, attributed in the report to a decline in the retail market.
“The summer is always tricky around here because we find that there are some seasonal adjustments upwards from tourism but there are also jobs people don’t take over the summer because of child care issues or students who work all year that go home over the summer. I’m not sure August is necessarily an indicator of where the economy is going. These are snapshots, and limited snapshots, and we like to look at a broader period of time,” Goldstein said.
The largest job gains were posted in government with 3,400 jobs being added in August in the public sector, including 2,500 jobs in state government and 1,300 jobs at the federal level. Local government lost 400 jobs.
Goldstein said much of increase in state government jobs could be attributed to work-study students coming back to campus and increases in university staff as classes began for the fall semester at the University of Massachusetts and other public colleges.
“We have no evidence that the administration has grown jobs to that degree,” Goldstein said.
The unemployment rate is based on a monthly sample of households. The job estimates are derived from a monthly sample survey of employers.
Financial activities also showed an increase of 300 jobs for the month, and mining and logging added 100 jobs.
While manufacturing jobs showed no change in employment from July, construction lost 1,400 jobs and education and health services lost 2,600 jobs last month.
Leisure and hospitality employment dipped by 800 jobs, information lost 400 jobs and “other services” lost 100.
Restaurant and Business Alliance President Dave Andelman estimated 6,800 jobs have been lost in the leisure and hospitality industry over four months and called on the Legislature to pass a meals tax holiday bill to spur the restaurant sector.
In prepared remarks to the South Shore Chamber of Commerce on Thursday morning, Federal Reserve Bank of Boston CEO Eric Rosengren described a “very slow recovery” and said the slowdown in the global economy was a “significant” impediment to faster growth in the United States.
Rosengren said in 2012 “there has been no meaningful improvement in the unacceptably high level of the U.S. unemployment rate.” He said he supports monetary policy actions to promote faster growth, such as those already announced to keeping short-term borrowing rates low and provide a stimulus through the purchase by the Fed of $40 billion a month in agency mortgage back securities.
“These purchases of MBS should place downward pressure on U.S. mortgage rates, which should support the housing market by lowering borrowing costs and providing additional support for house-prices to appreciate from depressed levels,” Rosengren said.
He said he believes that the risks involved are “considerably smaller and more manageable than the risk of allowing the economy to stagnate for another year or more.”
[Michael Norton contributed reporting]