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The Boston Globe

Business

State jobless rate rises to 6.7%

7,500 jobs added during the month

The Massachusetts unemployment rate ticked upward to 6.7 percent in December, the sixth month the rate has held steady or increased, state officials said Thursday.

The state also added 7,500 jobs in December and about 51,000 jobs overall last year, the report said.

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That shows a state economy experiencing slow to moderate growth, said Northeastern University economist Alan Clayton Matthews.

“And that’s about as good as you can expect right now,” he said, “considering events in Europe and the slowdown in the world.”

The state weathered the recession and its aftermath better than the nation, which had a 7.8 percent unemployment rate in December. However the state’s economy, like the nation’s, slowed in at the end of 2012.

Uncertainty over US fiscal policy, including the nation’s borrowing limit and the threat of significant federal spending cuts appears to have impacted Massachusetts employers, making them wary of hiring and investing. The state receives significant federal research and defense funding, spending that is under scrutiny by Congress.

Massachusetts economy has also been held back by weak demand from Europe and China.

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According to the Associated Industries of Massachusetts, the state’s largest business group, the state’s exports to Europe during first nine months of 2012 fell by $1.1 billion, or 13.5 percent compared with the same period a year ago, while exports to China dropped by 11 percent, or $177 million.

A separate survey of employers showed that Massachusetts added 7,500 jobs in December, state officials said. Yet the report also revised its November survey downward to show a loss of 3,200 jobs last month.

While the report appears to show conflicting trends of rising unemployment and employer hiring, economists said that is due to how the unemployment rate is calculated. Discouraged workers who have given up looking for work are not counted in the overall unemployment rate. But when those people return to their job search -- often because they feel their job prospects have brightened -- they are counted in the statistics, causing the unemployment rate to rise.

Sectors that showed job losses last month included the professional, scientific and business services sector, which includes lawyers, architects and engineers. It lost 1,000 jobs over the month, but added 22,800 jobs last year.

The number of government jobs was unchanged in December, but federal state and local government added a total of 900 jobs over 2012.

The sectors that gained jobs included the education and health services sector, which added 3,800 jobs last month and 7,300 over last year; leisure and hospitality, which gained 3,200 jobs and 6,300 jobs over the year; and construction, which added 1,400 jobs over the month and 300 over last year.

Financial activities added 100 jobs in December, and gained 1,900 over 2012.

Manufacturing gained 800 jobs last month, but lost 1,100 over last year.

Michael Goodmancq, a public policy professor at the University of Massachusetts at Dartmouth, said businesses may be cautious about spending and hiring because of fiscal uncertainties in the US and globally.

He also cautioned against putting too much stock in the month to month calculations, noting that they are often volatile and subject to large revisions.

“Right now the looming threat of sequestration and the debt ceiling and the ongoing challenges in Europe are the biggest strains on the Commonwealth’s economic recovery,” he said. “Some sectors are hanging in there, and others are dealing with uncertainty and the difficulties Washington has in solving our national problems.”

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