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The New Economy

New England, a leader in creating jobs, stumbles. Should we worry?

Only four states lost jobs in April, according to the Department of Labor. All four were in New England.

By / May 21, 2010

Massachusetts Gov. Deval Patrick speaks with workers prior to a news conference at a construction site in Chelsea, Mass., May 20. Although Massachusetts added more than 19,000 jobs last month, four New England states lost jobs. Is the region's recovery stumbling?

Elise Amendola/AP

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If the economic outlook for United States has been brightening, it's New England that has been lighting the way.

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The region avoided the brunt of the housing bust and missed the worst of the recession. Unemployment has been lower than the US average. Job numbers started growing here sooner than in much of the rest of the country.

But new employment numbers suggest that the region's recovery could be slowing.

In April, only four states in the US saw significant declines in their job rolls. All of them were in New England, according to a Labor Department report (.pdf) released Friday.

From March to April, Maine lost 6,500 jobs; New Hampshire lost 4,100; Rhode Island, 4,400; and Vermont, 1,900. Those aren't huge numbers. Massachusetts, which accounts for 60 percent of the economy, saw enough job gains to offset those declines.

Nevertheless, it's a troubling sign when a region leading a recovery stumbles.

"This speaks to the weakness of the recovery," says Ross Gittell, a professor at the Whittemore School of Business and Economics at the University of New Hampshire in Durham. "It's going to be a slow recovery."

That doesn't mean the rebound in New England has stalled. Employment in high-tech and information services will grow 9.2 percent and 7.4 percent, respectively, from their 2009 lows to 2013, Professor Gittell forecasts. By that point, the region's employment will have returned to its pre-recession peak.

And April's job-loss numbers, especially in small states like Maine and Vermont, may be not entirely reliable. The federal government's surveys involve small samples of workers.

"New England has been performing better than the country on average," says Jeff Thompson, an economist at the Political Economy Research Institute at the University of Massachusetts in Amherst. "My hunch is that a lot of this 'plunge' is small sample sizes in small states."

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