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Mass. job gains for 2018 turned out to be a vast exaggeration

Those employment numbers sure looked good for January: Employers added an estimated 11,400 jobs statewide in one month. The boom times just keep rolling, right?

But dig deeper into the monthly jobs release that came out on Friday, and a distressing number emerges. Almost as an afterthought, the state Executive Office of Labor and Workforce Development mentioned the results of an annual revision done by the federal government every year around this time. Those new estimates show the state added 20,000 jobs — throughout all of 2018.

No one expects you to memorize these monthly reports. So let’s go back to what the state agency said in a previous release, about December: Employers added 65,800 jobs in 2018, year over year.

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Wait a minute. Did some Marvel Universe villain just acquire all the Infinity Stones, snap his fingers, and cause 45,000-plus jobs to disintegrate in a flash?

If only we were talking about some comic book antihero and his evil scheme. Nope. This is the Massachusetts economy, and it turns out we may not have had all those jobs in the first place. Economists expect annual revisions to alter the figures, but the changes usually aren’t this pronounced.

Northeastern University economic guru Alan Clayton-Matthews, who crunches numbers like these for breakfast, expected a downward revision. But not one this dramatic. The mild-mannered economist called it “shocking.”

The monthly job estimates initially come from surveys of employers, he says, making them more of a sample estimate rather than a precise count.

But these annual revisions by the US Bureau of Labor Statistics are based on nine months of actual payroll data. That means they are more accurate. (The data will be eventually revised again, to reflect the final count for the full year.)

Clayton-Matthews expected to see a “loss” of roughly 20,000 additional jobs, not 45,000.

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But he doesn’t seem worried that the Massachusetts economy is slowing down significantly. Instead, he says, the meager job gains are most likely due to labor market shortages: Companies simply can’t find enough people to fill all their openings, particularly to replace retirees. The state’s economic growth is being constrained by demographics now, the new normal.

The Massachusetts economy remains healthy, he says, except for the widening inequities: Greater Boston vs. elsewhere, jobs requiring a good education vs. low-skilled ones.

Those imbalances, of course, affect the available labor pool for many of our fast-growing companies.

We’re not alone. Just look south: Both Rhode Island and Connecticut just reported major downward revisions in their 2018 jobs numbers, too. Pity poor Connecticut: The state still hadn’t regained all the jobs it lost in the Great Recession.

Massachusetts, New England’s strongest state, recovered its lost jobs years ago. But Donald Klepper-Smith, a West Tisbury economist, says the massive downward revision should still be cause for concern, particularly when a possible national recession looms around the corner. These are not the best of times, he says, to be watching those job counts shrink.

Klepper-Smith prefers to consider the numbers on an average annual basis, over the 24 months, to smooth out any spikes.

By that approach, the state added 31,000 jobs last year. Or you can compare December numbers, year over year, without a seasonal adjustment: In that case, he says, the math adds up to only 11,000 new jobs.

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The variations might help explain why Christopher Geehern of Associated Industries of Massachusetts is reluctant to make too much of the job-growth changes.

They could be a sign of “survey fatigue” among employers, he says. They could indicate the rise of the “gig economy.” Or maybe they mean something else entirely.

No matter how you slice it, the 2018 results turned out to be a vast exaggeration. If job growth is slowing because there aren’t enough workers to meet demand, it might seem like a good problem to have. But it’s still a problem.


Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.