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By Brooke Thomson
President and CEO
With apologies to Mark Twain, reports of the demise of the US labor market have been greatly exaggerated.
Employers both in Massachusetts and across the country continue to hire even after 18 months of relentless interest-rate increases by the Federal Reserve designed to slow economic growth and moderate inflation.
The economic growth rate in Massachusetts may have slowed to 1.2 percent in the fourth quarter of 2023, but “Help Wanted” signs remain out from Boston to the Berkshires.
The government reports that US employers added 275,000 jobs during February, well above expectations. It marked the third consecutive month of job gains exceeding 200,000 and the 38th consecutive month of job growth. Average hourly earnings rose by 4.3 percent over the year, although the pace of increases has been fading.
“We’ve been expecting a slowdown in the labor market, a more material loosening in conditions, but we’re just not seeing that,” Rubeela Farooqi, chief economist at High Frequency Economics, told the New York Times.
It’s a familiar story for Massachusetts employers, who continue to struggle in the search for qualified workers some three years after the epic labor-force disruption of the COVID-19 pandemic. Employers created almost 26,000 net new jobs from January 2023 to January 2024 and the commonwealth’s January unemployment rate fell to 3.0 percent, almost a full point lower than the national average.
Tricia Canavan, President and CEO of The Tech Foundry in Springfield and a member of the AIM Board of Directors and Executive Committee, told The Boston Globe’s Trendlines column that “(E)mployers are continuing to struggle” to hire technology workers. The number of available workers hasn’t recovered from a sharp drop during the pandemic.
It probably shouldn’t come as a surprise that an historically tight labor market created by a unique public-health crisis is taking a long time to unwind. The good news is that this remarkably resilient labor market may make possible the soft landing that will control inflation without casting the country into recession.
