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The sky isn’t falling on the Buffalo Niagara job market after all.

But it isn’t all blue skies and sunshine, either.

That was the bottom line from last week’s updated report from the state Labor Department on the Buffalo Niagara job market.

The good news: Fears that the local job market was losing jobs – as indicated by the Labor Department’s preliminary figures – are unfounded.

In fact, the region has been consistently adding jobs, and our job growth during 2011 was even a little better than initially reported.

“The good news is that we were doing better than we thought we were,” said Gary Keith, the chief economist at M&T Bank Corp. “We’ll take what we can get.”

The bad news: The pace of that job growth still is noticeably weaker than the rest of the state and the country as a whole, which means our recovery from the Great Recession once again is shaping up to be a lukewarm one, at best.

Even more alarming, the pace of our job growth has been slowing, which is exactly the opposite of what you want to see as an economic recovery takes hold.

We got off to a good start on hiring coming out of the recession, with local employers adding jobs at a nearly 1 percent annual pace during 2011. That’s stronger than the 0.8 percent pace initially reported and the strongest annual job growth that the region has enjoyed since 1999.

But the Buffalo Niagara job market couldn’t maintain its momentum last year. While hiring remained strong through the winter, it cooled a bit during the spring and slowed a little more during the summer, before finishing the year with a sluggish autumn.

Overall, our job growth last year cooled to a 0.7 percent annual pace, which isn’t bad by Buffalo standards, but was about a third slower than the 2011 increase. We maintained that pace into January.

And the jobs that are being created are mostly in low-paying service positions, at places like restaurants, hotels and stores. A significant number of the new jobs are temporary positions, a hiring step preferred by employers who are starting to see good things happening within their individual businesses, but aren’t quite convinced that the improvement is going to last.

It’s a story that’s all too familiar for the Buffalo Niagara economy: Take two or three steps forward, then take a couple back.

The optimists among us will look at the job numbers and see a job market that’s stronger than its been in more than a decade. Our job growth during 2011 and 2012, which totalled a little more than 1.6 percent, was the strongest two-year period for employment gains locally since a 2.5 percent growth spurt from 1999 to 2000. Last year’s job growth was the third strongest in the last decade.

The pessimists will snarl that it only takes the country one year to slog out the same gains that the Buffalo Niagara region needs two years to produce. The nation has been adding jobs at an annual pace of 1.6 percent or better throughout all of 2012, although the growth rate slipped to 1.5 percent in January and February.

To our credit, the Buffalo Niagara job market last year was robust by upstate standards, slightly outpacing the 0.5 percent upstate increase.

To our dismay, our growth was less than half of both the U.S. increase of 1.7 percent and the 1.4 percent gain statewide.

People looking at the bright side will see that the region’s private sector service economy is humming along nicely, growing at a 2 percent annual rate during January – almost three times the overall increase in jobs here.

Hiring at leisure and hospitality businesses is up more than 6 percent over the past year. The number of jobs at local stores has grown by 1.6 percent, double the region’s overall employment growth rate.

“You tend to see a lot of growth in those areas coming out of a recession,” said John Slenker, the state Labor Department’s regional economist in Buffalo. “They can absorb a lot of people – either people working a second job or people who are new to the labor market.”

Hiring at temporary help agencies also is strong, growing by more than 2 percent. (It was a sharp upward revision in the temporary help job numbers that accounted for much of the change in the revised employment data for last year.)

“These industries are behaving as you’d expect them to,” Slenker said. “Those are typically the categories that lead us out of a recession.”

Yet doomsayers will point out that jobs at stores, hotels, restaurants and other entry-level hires tend to pay poorly. The workers filling those jobs are gainfully employed, but they’re likely not on a path to immediate financial security.

Slenker said those jobs often are a stopgap, or a springboard to something better. And he said that the fact that the local economy is generating more of those entry-level jobs is a good sign that the job market is beginning to loosen up a little.

“The economy is beginning to produce more entry-level opportunities, and that’s been missing,” he said. “You want the economy strong across the board, but it begins with entry level jobs.”

That private-sector job growth takes on even more significance because the public sector – typically a rock of stability in a troubled job market – is shrinking as tax-strapped governments and school boards deal with sluggish revenue streams.

Government agencies across the Buffalo Niagara region shed almost 2 percent of their jobs last year and are down almost 4 percent from their 2009 peak.

Teachers and others at local schools are especially under the gun. Local schools eliminated 3.4 percent of their jobs last year and have whacked more than 8 percent of their positions since the darkest days of the Great Recession in 2009.

email: drobinson@buffnews.com