Is the economic crunch affecting the local job market?

It doesn’t take a genius to recognize that the current economic picture in the United States isn’t exactly rosy. The crash of the sub-prime mortgage market has had trickle-down effects through the entire economy, and the word recession is being tossed around more often than a football from Tom Brady’s hands.

Consumer confidence seems low, but sometimes that can be attributed to the fact that we’re in the midst of presidential primary elections and the gloom and doom that is often spouted by candidates. Still, there are legitimate consumer concerns. The ever-rising costs of oil and natural gas have a direct-to-pocket impact on the American wallets. Lower interest rates are generally met with inflation across the board, which could further threaten consumer spending.

The burning question that accompanies is how the labor market will be affected.

In December, the national unemployment rate rose to a two-year high of 5.0 percent, up from 4.7 percent in November. That’s something that America should be mindful of as economic concerns rise.

In Massachusetts, though, the story paints a more positive picture.

The data released last week for the state indicated that, as expected, there was a spike in December’s unemployment rate. The state unemployment rate rose from 4.3 to 4.5 percent, a slightly lower pace than the national economy. But for the Bay State, looking at this data in such a small window doesn’t paint the entire picture.

Over the 2007 calendar year, the state and national unemployment rates have moved in opposite directions: Massachusetts' rate is seven-tenths of a percentage point lower than the rate of 5.2 percent recorded in December 2006, while the U.S. rate is six-tenths of a percentage point higher than in December 2006.

Much of this can be linked to the ongoing success of some of the state’s key industries: healthcare and education. These industries added 300 jobs in December. Over the year, jobs in Massachusetts' largest super sector increased by 11,000 or 1.8 percent to 624,000, the largest numerical increase of any super sector.

We’re seeing similar growth in technology. Companies across the board continue to invest in improved technologies, making demand for key positions such as developers and project managers.

In fact, a recent survey of more than 100 business executives from Massachusetts-based companies conducted by AAI showed that now is a good time to be an IT employee in the Bay State.

Twenty-two percent of the respondents said that finding qualified candidates is a top priority for 2008. Sixty-nine percent of the respondents said that salaries for certified IT employees will rise this year, likely a response to the supply vs. demand issue.

We need to continue to watch the markets and the economy – both locally and nationally – with interest. But at this point key Massachusetts industries appear very safe which should be received as a silver lining for the state at this time of national economic concern.