fb-pixel Skip to main content

The Massachusetts job market is collapsing. Or not.

<?EM-dummyText [Drophead goes here] ?>

A “Now Hiring” sign hung on the door to the Urban Outfitters store at Quincy Market in Boston.
A “Now Hiring” sign hung on the door to the Urban Outfitters store at Quincy Market in Boston.REUTERS

Is the Massachusetts job market in free fall? Or is it humming along just fine? The answer depends on who you ask.

According to the official survey of business payrolls, Massachusetts has been creating new jobs at a consistent clip for several years now, with no sign of a recent lull.

Reach out to families, though, and it's a different story. The monthly survey of Massachusetts households suggests that jobs have become increasingly scarce since last summer and that many adults have simply stopped looking for work.

It's hard to say which survey paints a more realistic picture.

The upbeat, business view has the virtue of comporting with lots of other indicatorsstate and national — which show the US economy growing at a steady if unspectacular rate. But it's possible the more pessimistic household survey is an early sign of a coming crisis.


Is the job market strong or collapsing?

Here are the two views, in a single chart. In blue, you see the regular upward climb of payrolls in Massachusetts over the last two years. Right alongside, in red, is the wild rise and fall of employment in the household survey.

Note, in particular, how far the employment numbers have fallen in the household survey, well below the estimate from the business survey and far short of their 2014 trend.


Could the boom and bust pattern be a statistical fluke?

The household survey is too rigorous and well-regarded to simply dismiss (it's the same survey used to calculate unemployment rates).

And it won't do to chalk up the Massachusetts downturn to survey-related noise. If that were the case, you'd expect to see jagged jumps from month to month, not a smooth up-and-down curve.

It's possible there's a problem with the seasonal adjustment, which smooths the numbers to account for the fact that hiring tends to cluster in certain times of year, like the holiday shopping season.


An error in seasonal adjustment could be shifting things around in strange, but nonjagged ways, inflating the early-2015 results while making recent numbers look especially weak.

But it would take a pretty big error to explain the swings in the Massachusetts household survey. And if there were such a big error, you'd expect it to affect other states as well, which doesn't seem to be the case. The fluctuations in Massachusetts dwarf those across the other 49 states.

How can we tell which numbers are right?

Absent some other sign of trouble in the Massachusetts economy — a slowing growth rate, for example, or rising unemployment — it seems doubtful that the Massachusetts job market is in quite as much trouble as the crashing household survey would suggest.

Next week, the Bureau of Labor Statistics is scheduled to release updated numbers for all of 2015. And if it finds — and corrects — some glitch in the seasonal adjustment or underlying data, it may turn out that the mystery of the collapsing jobs market was just a chimera.

Then again, if the bleak picture holds up after review, that could be an ominous sign of bad news to come.

Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the United States. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz.