Massachusetts employers cut jobs for the third consecutive month in April, a sign that federal spending cuts and tax increases are slowing the state’s economy and taking a toll on hiring, economists said.
Employers trimmed payrolls by 1,400 jobs last month, after cutting 3,800 jobs in March and 800 in February, the Massachusetts Executive Office of Labor and Workforce Development reported Thursday. The state unemployment rate held steady at 6.4 percent.
Michael Goodman, a public policy professor at the University of Massachusetts Dartmouth, said across-the-board federal spending cuts that took effect in March, and a recession in Europe, the state’s biggest foreign trade partner, contributed to the slowdown.
“It’s like driving with your brake on,” Goodman said. “We’re still moving, but slowly.”
Economists at UMass have estimated that the reductions in federal spending will cost the state tens of thousands of jobs over the next several years. Massachusetts, with its concentration of universities, hospitals, technology, and defense-related firms, relies more heavily on federal spending than other states.
Alan Clayton-Matthews, a Northeastern University economics professor, said in addition to the across-the-board spending cuts, known as sequestration, a federal payroll tax increase this year left consumers with less to spend. Consumer spending is a major driver of the state and national economies.
“This wasn’t a pleasant thing to look at,” Clayton-Matthews said of the report. “I was hoping we’d see some increase in jobs, but this is consistent with expected weakness due to federal austerity.”
The Massachusetts economy has largely grown faster than the nation as a whole since the end of the last recession. Massachusetts regained all the jobs lost in the downturn earlier this year, even as the national employment remains at 2.6 million jobs below the prerecession peak.
The US unemployment rate, 7.5 percent in April, remains well above the state’s jobless rate.
But the recovery in Massachusetts has been uneven, concentrated in Eastern Massachusetts and sectors such as technology and health care, local economists said. Some 220,000 people in Massachusetts remained unemployed and looking for work in April. More than 40,000 of them have had federal emergency unemployment benefits cut as a result of US cutbacks, state labor department officials said.
The April job losses in Massachusetts were spread across several sectors. Government lost the most jobs, according to the estimates, shedding about 2,000 positions. The leisure and hospitality sector lost 1,900 jobs over the month and the financial activities sector lost 1,400. Construction, a sector that had been growing strongly in the beginning of the year, shed 600 jobs.
The monthly job estimates are subject to frequent revision. In March, labor officials initially estimated that the state lost 5,500 jobs, but revised to losses to 3,800.
Clayton-Matthews said it wasn’t all bad news, noting that two sectors that include technology firms, continue to grow. Professional, scientific, and business services added 4,500 jobs over the month, and the information sector grew by 900 jobs.Megan Woolhouse
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