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State gained fewer jobs than thought in ’11

The Labor Department said the number of claims for jobless benefits nationally rose to 362,000 last week, a level consistent with an improving labor market.
The Labor Department said the number of claims for jobless benefits nationally rose to 362,000 last week, a level consistent with an improving labor market. Rick Bowmer/Associated Press

Massachusetts’ recovery advanced at a far slower pace last year than first thought, with the economy creating just a fraction of the number of jobs initially reported, according to revised data released Thursday by the state Executive Office of Labor and Workforce Development.

Employment grew by just over 9,000 jobs in 2011, compared with initial estimates of nearly 41,000, according to the new data. The Department of Labor revises state employment data annually based on additional information that becomes available over the course of the year. The data could be further revised next year.

Joanne F. Goldstein, the state’s secretary of Labor and Workforce Development, said she believes the federal revisions underestimated job growth in the second half of 2011, and that the state overall added more than 9,000 jobs last year.

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She pointed to a steadily declining unemployment rate, which fell to 6.9 percent in December, from 7.8 percent in January 2011. (Unemployment is estimated from a survey of households, while job data come from a survey of employers, and the surveys can diverge.)

The state also reported Thursday that the unemployment rate held steady in January at 6.9 percent, compared with 8.3 percent nationally. In January, Massachusetts employers added 6,600 jobs, after increasing payrolls by 400 jobs in December.

“What’s going on, we think, is still good news for the Massachusetts economy,’’ Goldstein said. “The unemployment rate is still significantly below the national average.’’

The Labor Department adjusts its estimates as employers report hard data on the number of workers on their payrolls, which can take several months to collect. This hard data, available for the first six months of the year, showed that job growth in Massachusetts was weaker than estimated in the first half of 2011, Goldstein said, and that trend was applied to lower the job estimates in the second half of the year.

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Local economists expressed surprise at the dramatic revisions. They said job growth in Massachusetts may not have been as strong as first estimated, but they doubted it was as weak as the revisions showed for the last six months of 2011.

“We’re left with a history of 2011 which, I think, is still incorrect,’’ said Northeastern University economics professor Alan Clayton-Matthews.

Some of the largest downward revisions occurred last summer, when the national economy sputtered as concerns about the European debt crisis reached fever pitch, gridlock in Congress pushed the federal government to the brink of default, and the rating agency Standard & Poor’s lowered the US credit rating. In July, for example, it first appeared Massachusetts was bucking the trend, gaining more than 10,000 jobs.

Revisions released Thursday, however, estimate that the state lost nearly 3,000 jobs in July.

The size of the revisions at first gave Amherst College economics professor Brian Bethune pause, but he said smaller job gains appear to be in line with the growth of tax collections, which rise when more people are employed and earning salaries.

“It’s not that jobs disappeared,’’ he said, “it’s just that the recovery on the employment side is not as robust as people anticipated.’’

While some sectors, such as high technology and health care, have grown solidly, others, such as government, have not, Bethune said. In January, professional, scientific and business services, which includes a variety of technology, consulting, and research firms, led January’s job gains adding 3,500 jobs. Transportation and utilities added 1,800 jobs and leisure and hospitality jobs increased by 1,700. Construction gained 1,000 jobs.

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Those additions were offset by the loss of 1,600 education and health services jobs, and 1,300 government jobs.

Gregory Bialecki, the state’s secretary of Housing and Economic Development, said the economic trends in Massachusetts remain positive. Payroll tax collections rose 5 percent over last year, he said, and hotel receipts increased 8 percent.

“Even with this downward revision, we are on the plus side of the ledger,’’ he said. “The story continues to be that Massachusetts has weathered this recession.’’


Erin Ailworth can be reached at eailworth@globe.com. Follow her on Twitter @ailworth.