Thursday, October 21, 2010

Unemployment Rate in MA Drops

Its a crisp October day in Boston, keeping with consistency of a rather enjoyable autumn. Too many times the summer turns into a cold/rainy fall, a cold winter and a cold/rainy spring. This year we had a very nice spring (50s/60s/70s) and same for the fall. I can't help but enjoy a crisp but sunny 55 degree day. Here is some good news:

- The Massachusetts Unemployment Rate has dropped from 8.8% to 8.4%, the steepest drop since 1976. The national rate is hovering around 9.5%. I would say this fares very well for Deval Patrick, who has been maintaining the edge in a tight gubernatorial re-election campaign. Since Charlie Baker, his Republican opponent, is centerpiecing his campaign around Job Creation (as most Republicans are across the country and as anyone running for office should be doing) this would seem to take the wind out of his sails.

It will be interesting to see how he spins this. I suspect he will release a statement welcoming the improved economy, but say (a) that we are still at a net loss under Deval Patrick, (b) that we are not growing fast enough, and (c) that Patrick is somehow manipulating the real numbers.

On (a), we are still at a net loss under Deval Patrick but its kind of a silly argument to make. Patrick took office in 2006 and then saw the nation experience the worst economic catastrophe since the Great Depression, something completely out of his control. He has (in my view) made good and bad decisions under a very rough environment, but it seems now the MA economy is bouncing back, unemployment is dropping quite rapidly and the Commonwealth is faring much better than most of the rest of the United States. We will recover all the 2008-2009 job losses much more quickly than the rest of the country, and appear to be well on our way to recovery. That's a pretty good job if you ask me. The only thing that may hinder that would be the national economy, but that is another story.

On (b) we are not growing fast enough. Well yes it would be fantastic if we grew faster. And while this is only a single month's data, the steepest drop in unemployment since 1976 (when the recordings began) is pretty quick. It would be great to be experiencing 8 or 9% growth, but with the national economy really lagging I think this is pretty sufficient. Voters, I am guessing, will be happy with the trajectory. I am reminiscent of Bill Clinton's 1994 mid-term election when the economy was adding jobs at a pretty steady pace, and he lost control of Congress. However I am not sure what Patrick could do to accelerate growth (though I am guessing Baker would say cut taxes, cut spending, and deregulate, which is the Republican Party's answer to any single issue, ever, period. 9/11. Freedom. Support the troops.)

(c) Government employment data manipulated. Well yes I don't think employment is measured accurately enough in this country or the Commonwealth, but that is consistent. So when unemployment was low under Mitt Romney or Paul Celluci, they used the same metric that Patrick uses (or rather, the Office of Labor and Workforce Development use). I have heard it intimated that Patrick is hiding budget numbers until after the election, but there is not much he can do to artificially lower unemployment. All in all its good news.

That said, I reiterate, Massachusetts cannot experience a strong recovery if the national economy is grinding to a slow halt.

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