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The Buffalo Niagara job market is doing better than first though, but it’s far from red hot.

The local job market enjoyed its strongest job growth in three months during January, as a surge in hiring at local restaurants and hotels offset a steep seasonal slump in construction jobs, the state Labor Department said Thursday.

And revised data issued by the state showed that, rather than falling into decline late last summer, the local job market continued to slowly strengthen during the second half of last year. As a result, job growth during 2012 ran at an annual pace of almost 0.7 percent, nearly three times the 0.2 percent initially reported, but still less than half of the increase nationally.

The improved job numbers weren’t a surprise. Local economists had predicted that the job figures from last year would be revised upward once more extensive tax data was available, and that’s exactly what happened. Instead of adding just 1,300 jobs during the course of 2012, as initially reported, the region added 3,600 – almost three times as many.

However, had the region added jobs at the same pace that the country did during 2012, Buffalo Niagara’s labor market would have gained 9.200 new positions during the course of those 12 months.

“It’s a minor win for the area,” said Gary Keith, the chief economist at M&T Bank. “Our story continues to be moderate growth. It wasn’t as bad as we thought.”

According to the preliminary job numbers that had been released by the state, the Buffalo Niagara region began slowly losing jobs in August and continued to shed jobs throughout the rest of the year – a pattern that, on the surface, indicated that the region was in danger of slipping back into recession even though the rest of the country was growing.

But Keith and other local economists said the preliminary numbers appeared to be flawed, depressed by a steep drop in a subcategory that includes positions at temporary employment agencies. That drop turned out to be an error that was corrected when the revisions, based on the more-extensive U.S. Census Bureau data, were made.

The moderate job growth also continued into January.

The region added jobs at a 0.7 percent annual pace – 3,500 jobs in all – from January 2012 through January 2013, its strongest growth since October and a reversal from the tiny job loss the region experienced during December, the Labor Department said.

The region’s job growth was strongest in the private sector, with private employers adding jobs at a 1.1 percent annual pace. That growth helped offset a 1.5 percent decline in government jobs, especially at local schools.

“We’re moving in the right direction,” said John Slenker, the Labor Department’s regional economist in Buffalo.

Even so, job growth in the Buffalo Niagara region remains subpar. The 0.7 percent job growth rate during January was less than half the nationwide growth of 1.6 percent and well below the statewide increase of 1.1 percent.

Among New York’s 13 major metro areas, the Buffalo Niagara region ranked in the middle of the pack for job growth, lagging behind downstate areas such as New York City and Nassau and Suffolk counties, as well as upstate areas such as Albany, Glens Falls, Poughkeepsie and Ithaca.

“New York’s growth is overwhelmingly concentrated downstate,” said E.J. McMahon, the director of the Albany-based Empire Center for New York State Policy.

During January, the job growth was fueled by hiring at local restaurants and hotels, which added jobs at a 6 percent annual pace, as well as hiring at temporary help agencies, which increased by 2 percent over the year.

Those gains offset a steep, 12 percent drop in construction employment, which had been strong for most of the past two years but may have been depressed by the cold weather in January, Slenker said.

“I think we’re going to see a rebound,” Slenker said. “I think this is temporary.”

The number of government jobs slid by almost 2 percent, mainly because of fewer jobs at local schools.

email: drobinson@buffnews.com