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Unemployment in Massachusetts dropped in October but pace of recovery slowed

More than half the jobs lost in the early stage of the pandemic have now come back, but more unemployed people have given up looking for work.

The Massachusetts unemployment rate fell to 7.4 percent in October from a revised 9.8 percent in September.
The Massachusetts unemployment rate fell to 7.4 percent in October from a revised 9.8 percent in September.Michael Dwyer/Associated Press

The Massachusetts unemployment rate fell to 7.4 percent in October from a revised 9.8 percent in September as employers added jobs for a sixth straight month, the Baker administration said Friday.

Employers in the state created 11,400 jobs last month, about a third of the revised 36,400 new hires in September, according to the Department of Unemployment Assistance. Gains were highest in the trade/transportation and professional/business services sectors, while the accommodation and food industry was flat. The government sector shed 4,200 jobs.

Massachusetts has added back more than half of the 690,000 jobs that disappeared in March and April, and the unemployment rate has dropped from a pandemic peak of 17.7 percent in June.

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But the rate of job creation has slowed in each of the past four months, and claims for unemployment insurance show a pickup in layoffs as well as an increase in the ranks of the long-term unemployed.

In another troubling sign, the October labor force decreased by 155,600 to 3.61 million, as many people without jobs gave up looking for work. The labor force participation rate, the share of the working-age population that is either employed or seeking a job, was down 2.8 percentage points over the month to 63.7 percent.

Job gains are slowing across the country, as employers grow more cautious amid a record number of new COVID-19 cases and the failure of Congress to agree on additional economic stimulus. The national unemployment rate was 6.9 percent in October.

Looming on the horizon is the end of two special federal unemployment programs: one covering gig workers and others not eligible for traditional state jobless benefits, the other providing 13 weeks of extra payments once a recipient’s state payments run out.

Some 477,000 people in Massachusetts face a Dec. 26 cutoff of the federal benefits, according to a report this week by the Century Foundation. About two-thirds of those recipients may qualify for up to 13 weeks of extended state benefits.

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Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.