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Massachusetts jobless rate declines to 6% in May

The state unemployment rate in May fell to its lowest level in more than three years as Massachusetts employers added jobs for the sixth consecutive month, the Executive Office of Labor and Workforce Development reported Thursday.

The jobless rate, which has declined steadily since last summer, dropped to 6 percent last month, from 6.3 percent in April, to reach the lowest level since September 2008. Employers increased payrolls by 7,500 jobs in May, after adding a revised 1,700 jobs in April.

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“This is good news, and what makes it very good is we’ve had consistently good job growth over the past five months,” said Alan Clayton-Matthews, an economics professor at Northeastern University. “The evidence is piling up that we’re growing faster than the nation as a whole.”

Buoyed by strong technology, health care, and education sectors, Massachusetts, has generally recovered faster from the last recession than the nation as a whole. The state has added nearly 38,000 jobs since the beginning of the year, an annual growth rate of more than 2 percent a year, compared to a national rate of about 1.5 percent.

Earlier this week, the Commerce Department reported that Massachusetts last year had the seventh fastest growing economy among the 50 states.

May was a disappointing month for the US economy as the financial crisis in Europe, a slowdown in China, and uncertainty about the durability of the recovery weighed on employers. The nation added just 69,000 jobs last month while the unemployment rate rose for the first time in a year, to 8.2 percent.

Despite the solid job gains in Massachusetts, there were also signs that uncertainty is creeping into hiring decisions here, posing the risk of another slowdown — or worse. While professional and business services led the state’s job gain in May, adding 6,000 jobs, much of those gains were driven by hiring from temporary employment agencies.

That is a sign that businesses are lacking the confidence to commit to permanent hiring, said Michael Goodman, an economic analyst and professor of public policy at the University of Massachusetts Dartmouth. In addition, Goodman added, job growth in health care and higher education was essentially flat last month, possibly related to the unsettled budget situation in Washington. Both sectors rely on government funding for research and other activities.

Unless Congress acts before the end of the year, automatic, across-the-board budget cuts will go into effect and Bush-era tax cuts will expire — a so-called fiscal cliff that many economists say threatens the recovery. In a contentious election year, it remains unclear whether Congress will address these issues in time.

“This element of uncertainty may be making employers hesitate,’’ said Goodman.

Overall, economists viewed the May employment report as positive. Six of the 10 private employment sectors tracked by the state added jobs in May. The unemployment rate declined even as more people entered the labor force, an indication that some workers may be sensing an improving job market and resuming job searches.

Only those who are employed or actively looking for work are counted in the labor force.

“I’m starting to get a little more bullish on Massachusetts,” said Brian Bethune, an economics professor at Gordon College in Wenham. “Things seem to be picking up here.”

Employers in trade, transportation, and utilities, which includes retailers, added 2,700 jobs last month. Other services, which include repair businesses, gained 1,100 jobs while information, a technology sector, added 700.

Education and health services added 200 jobs and manufacturing 100. Government also added 800 jobs last month.

Employment in financial services was flat. Leisure and hospitality, which includes hotels and restaurants, lost 2,300 jobs in May, while the construction industry continued to struggle, shedding 1,700 jobs.

Construction employment has declined by 4,700 jobs, or more than 4 percent, over the past year.

Globe reporter Erin Ailworth contributed to this report. Robert Gavin can be reached at rgavin@globe.com.
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