Jobless rate in state rises slightly

Analysts remain optimistic amid broader growth

By Erin Ailworth
Globe Staff / December 17, 2010

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The Massachusetts unemployment rate rose in November for the first time in 10 months as employers cut thousands of jobs, but economists said it is likely a temporary setback.

The state jobless rate inched up to 8.2 percent from 8.1 percent in October — the first increase since January, the state Executive Office of Labor and Workforce Development reported yesterday. Massachusetts employers cut 8,600 jobs last month, after adding 9,000 in October.

Despite what he called a “teeny uptick’’ in the unemployment rate, Michael Goodman, an economic analyst and professor at the University of Massachusetts Dartmouth, said the Massachusetts economy has rebounded from the recession faster than the country as a whole and should continue to grow.

The state has added more than 30,000 jobs over the past year, Goodman said.

“We’ve had a very strong year in job creation,’’ Goodman said. “Clearly, there’s some volatility in the month to month data, but overall the labor market is slowly but surely on the mend.’’

Many economists expect both the state and national economy to slow over the next few months before regaining momentum later in 2011. Nationally, the unemployment rate rose to 9.8 percent last month from 9.6 percent in October, according to the US Department of Labor. Job growth was also disappointingly weak: US employers added just over 39,000 jobs in November.

In Massachusetts, the rising unemployment rate and job losses indicate that the economy is “slowing substantially, but still growing,’’ said Alan Clayton-Matthews, a Northeastern University economics professor. He expects that trend to continue into the first part of 2011, before a slow acceleration.

But, Clayton-Matthews said, the job market might not be as weak as yesterday’s report suggested. The increased unemployment rate, for example, may be a bit deceiving given that the labor force grew substantially as more people began or resumed job searches, he said.

Economists consider a growing labor force a positive indicator because more people will look for work if they sense an improving job market. The state’s labor force has increased for four consecutive months.

“The fact that the unemployment rate went up does not indicate a weak economy,’’ Clayton-Matthews said, “it might indicate some confidence.’’

There are also signs that the national labor market is strengthening. First-time claims for unemployment benefits fell for the third time in four weeks, slipping by 3,000 to 420,000 last week, the US Labor Department reported. The four-week average, a less volatile measure of claim activity, fell to the lowest level since the summer of 2008.

The rise in the Massachusetts rate comes after several months of steady declines. The Massachusetts jobless rate peaked at 9.5 percent in January. A year ago, in November 2009, the state’s unemployment rate was 9.2 percent.

Joanne F. Goldstein, state secretary of Labor and Workforce Development, said the small increase in the November unemployment rate is offset by the economy’s overall progress.

“We’re obviously going in the right direction,’’ Goldstein said. “All the indicators are consistent with the notion that we are heading out of the recession, that we’re leading the nation out of the recession.’’

Job losses last month were concentrated in the leisure and hospitality sector, which includes hotels and restaurants. The sector shed 6,100 jobs.

Also losing jobs in November were: other services, which includes auto repair, maintenance, and personal services and shed 1,900 jobs; information, which includes software publishers and lost 1,800 jobs; and professional, scientific and business services, which lost 1,100 jobs.

But some sectors added jobs in November. Education and health services gained 2,100 jobs; construction, 600 jobs; government, 500 jobs; and manufacturing 200 jobs.

Erin Ailworth can be reached at