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Massachusetts' employment growth has been, to use a technical term, meh.
The latest: Employment was flat over the 12 months through January, newly revised Labor Department data show. Construction and retail were down — not a surprise — but professional services and information also took a hit. Those are newer cracks in what’s supposed to be the state’s white-collar foundation.
Hiring gains came mostly in health care and private education — our prized “eds and meds.” The leisure and hospitality sector, along with state and local government, also offset declines elsewhere.
- The unemployment rate ticked up to 4.2 percent from 3.7 percent a year earlier. The number of people collecting benefits was the highest since February 2023.
Why it matters: Job losses across a swath of industries underscore the state’s vulnerability as President Trump’s second-term economic agenda shapes up to be a stress test we’re not ready for.
Trump wants to turbocharge manufacturing by expanding tariffs on imported goods, while slashing what his team calls “government and government-adjacent” spending — a catch-all that includes anything he hates.
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That’s ominous news for Massachusetts. The top of Trump’s hit list includes health care, education, and clean energy — all areas where we excel.
Recap: The Trump administration is already moving to shrink federal support for the research that sets our health care and education apart.
It’s trying to cut reimbursements for “indirect costs” like rent and utilities — a change currently tied up in court, but one that could cost Massachusetts researchers $550 million. National Science Foundation grants have been frozen.
- Harvard, MIT, and other institutions have already frozen some hiring and spending in anticipation.
House Republicans are also eyeing Medicaid cuts — which would hit hospitals and the state budget especially hard — and a tax hike on big university endowments.
Meanwhile, Trump is gutting the Education Department and threatening to yank funding from schools that don’t get in line with his priorities: eliminating diversity programs, cracking down on antisemitism, and quashing pro-Palestinian protests.
Zoom in: Health and education alone account for about one-quarter of all jobs in the state — up from 15 percent in 1990. Manufacturing, by comparison, has dropped to just 6 percent of employment, down from 16 percent in the early ’90s, when the likes of Digital Equipment and Raytheon powered the economy.
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And while Trump talks about bringing back factories, Massachusetts isn’t likely to benefit much. All the tariffs in the world won’t overcome the state’s high costs, desk-job talent base, and strict regulations. Even the local biotech giants make most of their drugs somewhere else.
Knock-on effects: MAGAnomics will hit more than eds and meds.
- The state’s clean tech sector — more than 100,000 jobs strong and projected to grow 30 percent by 2030 — faces new uncertainty from federal rollbacks on climate programs and environmental regulation.
- Even tourism isn’t safe. Canadians, the top source of international visitors to Massachusetts, are steaming over Trump’s tariffs and 51st state bluster. Canadian tourists spent $620 million here last year, according to Meet Boston. A boycott would sting.
- Hiring by state and local governments has been cushioning weak private sector growth. That’s not a forever solution, especially if the local economy stalls and tax revenues fall.
Trump’s treasury secretary, Scott Bessent, says that’s precisely the point.
In a speech last month, he warned that “over-reliance on public sector hiring” is bad for long-term growth. “Our goal is to re-privatize the economy.”
Bessent said White House policies focused on tariffs, deregulation, and tax cuts would rebalance the economy.
But he and Trump have acknowledged that jobs and growth would suffer in the short run — a “detox,” in Bessent’s words. They also gloss over the fact that as more Americans move into their 80s and 90s, health costs will continue to climb.
Final thought: Yet even Federal Reserve chair Jerome Powell struck a note of caution last week.
“From our standpoint, employment is employment,” Powell said. “We don’t have policies that address different kinds of employment. But the elected government has a different role and they can have those.”
So here’s the question for Massachusetts: Can Trump actually jump-start his beloved blue-collar industries without running the rest of the state’s high-end economy into the ground?
If this is what rebalancing looks like, Massachusetts better get used to walking a tightrope.
Larry Edelman can be reached at larry.edelman@globe.com.