Latest Labor Data Points to A Robust Return To Economic Recovery
Preliminary job estimates from the Bureau of Labor Statistics (BLS) show that Massachusetts gained an impressive 19,600 jobs in January 2023, following December’s gain of 3,800 jobs, pointing to the labor market’s return to pre-pandemic levels. The largest over-the-month private sector job gains were in Education and Health Services (5,000 jobs), Trade, Transportation, and Utilities (3,200 jobs), and Leisure and Hospitality (3,000 jobs), resulting in a total employment figure of 3,743,500. Since April 2020, the state has gained an impressive 681,900 jobs.
The government sector gained 1,900 jobs over-the-month and 12,200 jobs over the year, while Manufacturing gained 1,500 jobs over the month and 1,200 jobs over the year. Construction gained 1,400 jobs over-the-month and 4,000 jobs over the year. Other service sectors gained 700 jobs over-the-month and 5,400 jobs over the year. Information technology gained 500 jobs over-the-month and 3,000 jobs over the year. The financial services sector did not gain or lose any jobs over the month but did add 7,900 jobs over the year.
Looking at the entire year from January 2022 to January 2023, BLS estimates that Massachusetts gained 117,200 jobs. The largest over-the-year gains occurred in Professional, Scientific, and Business Services (27,400 jobs), Leisure and Hospitality (23,300 jobs), and Education and Health Services (16,400 jobs).
Based on these positive trends, the January 2023 unemployment rate dropped to 3.6 percent, down one-tenth of a percentage point from December 2022’s revised estimate of 3.7 percent.
The total labor force participation rate increased in January by 0.1 percentage point to 64.8 percent, causing the state’s seasonally adjusted unemployment rate to drop by 0.4 percentage points over the year. The January estimates show that 3,597,700 Massachusetts residents were employed and 132,600 were unemployed, resulting in a total labor force of 3,730,300. Over the month, the January labor force increased by 3,900 jobs from December 2022, with 8,100 more residents employed and 4,200 fewer residents unemployed.
The BLS conducted an annual year-end revision (benchmark) process that resulted in positive changes to labor force estimates from 2018 to 2022. The revisions showed lower unemployment rates ranging from 0.1 to 0.8 percentage points than previously published estimates, indicating that Massachusetts’ economy has been stronger than previously thought. The largest year-end revision downward of 0.8 of a percentage point occurred in January and February 2022.