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Unemployed increase as Mass. economy slows

The number of unemployed workers in the state rose for the fourth consecutive month in August as the Massachusetts economy has grown too slowly to absorb the increased number of people seeking work.

More than 250,000 Massachusetts residents — the most in two years — were counted as unemployed last month, up from about 223,000 in April, the state Executive Office of Labor and Workforce Development reported Thursday. During this period, the state jobless rate has climbed nearly a percentage point, to 7.2 percent from 6.4 percent.

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The Massachusetts unemployment rate is just slightly below the 7.3 percent national rate, which has declined recently.

“Recent employment growth has been slow,” said Northeastern University economist Alan Clayton-Matthews. “The number of jobs is not increasing, but people are entering the labor force. That’s driving the number of unemployed up and the unemployment rate.”

Massachusetts employers added 7,500 jobs in August, after cutting jobs in each of the two previous months, the state reported.

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Since the end of the last recession, Massachusetts was generally growing faster than the nation as a whole, but the economy has slowed markedly in recent months. Federal budget cuts, weakening economies in key foreign markets such as Europe and China, and uncertainty about future US economic policies were among the reasons cited by economists for the state’s weakened expansion.

The automatic federal budget cuts known as sequestration have hit the state particularly hard since Massachusetts receives a disproportionate share of research and other federal funds because of the concentration of hospitals, universities, defense-related firms, and other research institutions.

‘The national economy and the state economy appear to be treading water.’

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In June, the University of Massachusetts estimated that the state economy grew at an annual rate of less than 1 percent between April and June, compared with 1.7 percent for the US economy.

“The national economy and the state economy appear to be treading water,” said Michael Goodman, a public policy professor at the University of Massachusetts Dartmouth. “We’re being propelled forward by a strong housing market, and held back by counterproductive [budget] policies” as well as a global economic slowdown.

The housing market is one of the bright spots of the economy as low, but rising mortgage rates motivate buyers. Massachusetts home sales in July climbed to their highest level in seven years, according to Warren Group, a Boston real estate tracking firm.

The housing rebound has helped make construction the state’s fasting growing sector during the past year. Construction employment has grown by 4,700 jobs, or 4.1 percent in the last year, compared with 1.4 percent for overall state job growth. Construction added 900 jobs in August.

Education and health services led job gains in August, adding 4,100 jobs. In the past year, employment in the sector has grown by 16,300 jobs or 2.4 percent.

Leisure and hospitality, which included hotels and restaurants, gained 1,500 jobs and government added 800 jobs in August. Financial activities added 100 jobs.

Manufacturing added 1,100 jobs in August, but experienced a net loss of 1,500 jobs during the year.

Professional, scientific, and business services, which included technology, research, and consulting firms, shed 300 jobs in August. That sector, however, has added more than 10,000 jobs in the last year.

Megan Woolhouse can be reached at mwoolhouse@globe.com.
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