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Good news peeking through

Bay State gains jobs for first time in a year

By Robert Gavin
Globe Staff / June 19, 2009
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Massachusetts employers boosted hiring for the first time in a year last month, ending 11 consecutive months of job losses for the state and providing another sign that an end to the recession is approaching.

Employment in the state grew by nearly 5,000 jobs in May, the first monthly gain since the previous May and the biggest monthly rise since January 2008, the state Executive Office of Workforce Development reported yesterday. The state unemployment rate rose to 8.2 percent last month from 8 percent in April, and is at the highest level since late 1992.

Analysts cautioned that one month of gains doesn’t indicate that the economy has begun to recover. But taken with other positive signs, such as improving consumer and business confidence, the state is moving closer to an economic turning point, they said.

“This has to be good news. I don’t know any other way to interpret it,’’ said Alan Clayton-Matthews, an economic analyst and professor at the University of Massachusetts at Boston. “It doesn’t mean the recession is over, but we’re seeing the signals you’d expect if the economy was near the bottom.’’

Many economists expect the recession here and nationally to end in the next several months. Massachusetts entered the recession early last year, a few months after the national downturn began. The US recession is already the longest economic downturn since the Great Depression.

Along with the nation’s economy, the state economy deteriorated rapidly in the final months of 2008 and the beginning of this year. The news was relentlessly bad: steep job losses, surging unemployment, and frequent layoff announcements. Now, while the bad news hasn’t stopped, it is increasingly mixed with good, or at least better, news.

For example, consumer confidence in Massachusetts jumped in April, according to a quarterly survey by the Boston consulting firm Mass Insight, and business confidence has risen in each of the past three months, Associated Industries of Massachusetts recently reported. Stock prices, an indicator of future economic activity, have climbed about 10 percent this year for the state’s publicly held companies, according to the Bloomberg Massachusetts Index.

Meanwhile, not only has the pace of layoff announcements declined, but many companies say they are hiring.

Among them is Boston-Power Inc. of Westborough, an advanced battery maker, now looking to fill as many as 30 jobs as it expands its sales force and technical team, said Christina Lampe-Onnerud, the company’s chief executive and founder. In addition, the company, which makes batteries for notebook computers, defense applications, and the emerging electric car market, could hire another 600 workers over the next two years should it win alternative energy funding from the federal stimulus law for a factory in Auburn, Lampe-Onnerud said.

“The whole company is growing,’’ Lampe-Onnerud said. “We’re part of this global trend for green.’’

Not only did Massachusetts add jobs in May, analysts said, it also experienced growth in the key sectors that drive the state’s economy, including health and educational services, financial services, and professional and business services. Professional and business services, which include law, technical, and consulting firms, led May’s gains, adding 2,600 positions, the state reported.

That’s particularly encouraging since the sector is a bellwether for the state’s economy, said Andre Mayer, senior vice president for research at Associated Industries of Massachusetts. “This is an area where you would be looking for increases if the economy was starting to turn around,’’ Mayer said. “It looks like an improvement is beginning.’’

Pegasystems Inc. of Cambridge, which makes automation software, is the type of firm included in the business and professional services sector. Pegasystems recently reported record revenues in the first quarter, up nearly 30 percent from a year earlier, and is hiring sales, technical, and support staff, said Jeff Yanagi, vice president of human resources.

Yanagi said the company expects to hire as many as 250 new employees this year, about half locally. The company employs some 950 people worldwide, about half in Cambridge.

“The company is growing, and the market demand is growing,’’ Yanagi said. “We’re hiring across the board.’’

While the outlook is brightening, the recession isn’t over yet, analysts cautioned. The state is likely to see job losses resume in coming months, and the unemployment rate continue to climb. For many, like Brenda Brooks Sr. of Dorchester, jobs will remain hard to get.

Brooks, 56, was laid off from her job as an administrative assistant in April, and has been looking for work ever since. She estimates she has applied for more than 100 jobs since then, but has received only one response.

“I’m finding nothing,’’ said Brooks, who said she had never been out of work before. “It’s just brutal out there.’’

Robert Gavin can be reached at rgavin@globe.com.