State adds 72,100 new jobs, shrinks unemployment rate but still highest in country

Mike Groll

For a second straight month, Massachusetts recorded the highest unemployment rate in the country in July, even though it added 72,100 new jobs last month.

The local jobless rate shrunk by 1.6 percentage points in July, to 16.1 percent, compared to a revised 17.7 percent in June, according to state-by-state data released Friday by the US Bureau of Labor Statistics.

But even with that dip in the unemployment rate, Massachusetts remained almost 6 percentage points above the national average of 10.2 percent last month, likely due to its aggressive shutdown measures taken in response to the coronavirus last spring.

New York, another state that reacted aggressively, had the second highest unemployment rate at 15.9 percent, while Utah had the lowest, at 4.5 percent.

The Massachusetts unemployment rate was almost double New Hampshire’s rate of 8.2 percent and significantly higher than all other New England states: Rhode Island, 11.2; Connecticut, 10.2; Maine, 9.9; and Vermont, 8.3.

When the virus first began to spread in March, Massachusetts moved decisively to contain it with the shutdown of many businesses and schools. It was a strategy that helped to gradually lower the infection rate to one of the lowest in the country. But it came with big job losses.

In March and April alone, Massachusetts, one of the states hardest hit in the early stages of the pandemic, shed 690,500 jobs, wiping out the gains that followed the end of the last recession in 2009.

Earlier in the year, unemployment in Massachusetts was at a near-record low 2.8 percent before surging as Governor Charlie Baker closed a large swath of the economy.

While the unemployment rate remains high, the state in July continued to add jobs in a variety of sectors, including leisure and hospitality (35,300 jobs); trade, transportation, and utilities (15,000); education and health services (7,300); other services (6,300); manufacturing (2,300); construction (1,900); and information (600). Losses occurred in financial activities (600) and professional, scientific, and business services (800).

The gain of 72,100 jobs last month was fewer than the previous month, when 94,600 jobs were added.

After an initial delay in responding to the virus, Massachusetts required masks and social distancing, sharply limited activities both inside and outdoors, and reopened at a cautious pace. Those measures, while earning the state praise from national public health officials, help explain the big hit taken in the job market, economists say.

Another factor in the state’s big loss of jobs is its reliance on industries especially hard-hit by the shutdown, including health care, education, and travel-related business such as restaurants and hotels.