The Massachusetts economy lost jobs for the first time in seven months in June, reflecting a sharp slowdown as looming uncertainties about the economic crisis in Europe and political gridlock in the United States make employers cautious to hire.
Massachusetts employers cut payrolls by 2,600 jobs last month, the first job losses since November, as the unemployment rate held steady at 6 percent, the state Executive Office of Labor and Workforce Development reported Thursday. In the past three months, the state’s economy generated just over 4,000 jobs, compared with nearly 29,000 in the first three months of the year.
“The state’s economy is still growing, but it’s also slowing,” said Northeastern University economics professor Alan Clayton-Matthews. “Employment growth has been roughly the same in Massachusetts as the US.”
Job growth nationally has slowed, and weak US recovery has weighed heavily on Massachusetts. The nation added just 80,000 jobs in June, while the US unemployment rate that has hovered above 8 percent for more than two years.
Economists said uncertainty surrounding the US presidential elections, federal spending cuts, and the extension of Bush-era tax cuts have made employers reluctant to expand. The economic crisis in Europe has particular significance for Massachusetts, which exports about 40 percent of its products there and benefits from European tourism.
Carol Troxell, who runs several stores at Faneuil Hall Marketplace in Boston, said sales have slowed from last year, in part because of fewer travelers from Europe.
“Expansion is out of the question, and we are not staffing to the levels we had even a year ago,” Troxell said. “It is a very tough year for small retailers who are struggling to pay their landlords, vendors, and keep their employees happy while trying to make a profit.”
The European situation and the weak US recovery are among the reasons that local economists have anticipated a slowdown in Massachusetts. In addition, economists said, some slowing was only to be expected after strong growth in earlier months.
Job losses in June were led by the struggling construction industry, which shed another 2,100 jobs. The sector has lost more than 5,000 jobs since March, and 7,200 from a year ago — a decline of 6.6 percent.
“It’s been awful; there’s no other word to describe it,” said Mark Erlich, executive secretary-treasurer for the New England Regional Council of Carpenters. “It hasn’t been a recession, it’s been a Depression.”
In past downturns, carpenters and others in the construction trades could move to another state to find job opportunities. But since many states fared worse than Massachusetts, jobs have been difficult to find anywhere. Erlich said he is hopeful that several apartment projects that are in the planning stages will soon get underway.
Until then, he said, many unemployed construction workers are “hanging on by the skin of their teeth just trying to survive until things improve.”
The state’s leisure and hospitality industries also lost 2,100 jobs in June, according to Thursday’s employment report. Education and health service jobs declined by 1,000 in June, mostly because of job losses in educational services, which include colleges and universities. Government shed 700 jobs last month.
But other key sectors adeded jobs. The professional, scintific, and business services sector gained 1,900 last month.
Trade, transportation and utilities, which includes retailers, added 700 jobs. Information, which includes software publishers, also gained 700 jobs. Financial services added 400 jobs, and manufacturing, 300.
Aaron Green, president of Professional Staffing Group in Boston, said hiring by local companies slowed between April and June, but it has begun to pick up again in recent weeks. A June survey of Boston area employers by his company found that 27 percent of respondents planned to increase staffing levels in the next 90 days, compared with 18 percent a year ago.
“It seems like people are looking into the future optimistically,” Green said, “even though the second quarter wasn’t a gangbuster hiring period.”