The new report by MassBenchmarks, the journal of the Massachusetts economy, indicates growth is not translating into jobs.
Hadley, Dec. 18, 2008 -- staff/ Michael S. Gordon -- Michael D. Goodman, at the UMass Donahue Institute.HADLEY – The state’s economy is growing, but that growth is not translating into jobs, according to economists who study the state’s economy for the publication MassBenchmarks.
“It’s just hard to see job growth,” said Michael D. Goodman, an associate professor of public policy at the University of Massachusetts at Dartmouth and an editor of MassBenchmarks. “I think we need to grow more. I think economic growth needs to be faster.”
Goodman also warned Thursday that cuts in government budgets, a weak housing market and rising energy prices could derail the progress the state has seen. Goodman said spiking oil and gasoline prices could be particularly damaging.
“It takes money right out of the pockets of consumers,” he said. “And since we don’t produce much oil here, it ships that money right to oil-producing countries. These high prices have a negative effect on consumer confidence. It makes people not want to spend money.”
The latest Massachusetts Current Economic Index for February was up 3.9 percent from January and 3.5 percent from February of 2010, Goodman said. The Index is an annualized rate of growth, meaning that if the economy grew as fast all year as it did in February, it would grow 3.9 percent over the year.
“Think of it as a speedometer,” Goodman said. “That’s pretty much on pace with the nation’s growth. That is respectable.”
Growth is not translating into jobs because workers are more productive, Goodman said. Much of the state’s growth has been in the highly productive technology sector in and around Boston.
MassBenchmarks is the journal of the Massachusetts economy published by the UMass Donahue Institute in collaboration with the Federal Reserve Bank of Boston. The Donahue Institute has offices in Hadley.
The national unemployment rate dipped to 8.8 percent in March. But in Springfield, the unemployment rate fell from 14.4 percent in January to 13.8 percent in February. Local unemployment statistics lag a month behind.
Goodman said the recession has been especially hard on places like Springfield, urban areas with large numbers of unskilled workers who held blue-collar jobs.
There was good unemployment news Thursday. New claims for unemployment dropped by 10,000 nationwide to 382,000, the third drop in four weeks.
For Massachusetts alone, there were 7,099 initial claims for the regular unemployment insurance program and 121,163 continued claims. Both initial and continued claims are down compared with last year.
Retailers collectively saw a 2 percent increase over last March, the International Council of Shopping Centers said. That compares with expectations for flat revenue or a small decline, according to The Associated Press.
