fb-pixelJobless rate up in Mass. for 2d month - The Boston Globe Skip to main content

Jobless rate up in Mass. for 2d month

The Massachusetts unemployment rate inched up to 6.3 percent in August, the second straight monthly increase and another sign that the local economy is slowing.

The state Executive Office of Labor and Workforce Development reported Thursday that the state shed a net 4,800 jobs last month, pushing the unemployment rate up from 6.1 percent in July. The losses would have been steeper except for an unexpected burst of hiring by federal and state government agencies.

Moreover, Massachusetts updated the employment figures for the previous month, finding that the state added a mere 300 jobs in July, down from an initial estimate of 1,600. The downbeat report is a sharp turnaround from the beginning of the year, when the Massachusetts economy was adding nearly 10,000 jobs a month.


“The trend is going in the wrong direction,” said Elliot Winer, chief economist for the Northeast Economic Analysis Group. “It’s a very weak report.”

In another dour sign, the data also show that thousands of people have dropped out of the local workforce altogether over the last two months.

Some industries, including construction, were particularly hard hit. Despite the emergence of construction cranes over the Boston skyline, the sector lost 1,400 jobs statewide in August alone, and 5,200 so far for the year.

“We are just treading water,” said Scott Seaver, the president of Seaver Construction Inc. in Woburn, where the workforce of 20 is half what it was before the recession. “We haven’t had to hire for quite some time.”

The slowdown in Massachusetts mirrors the economic situation across the country, as the combination of the debt crisis in Europe, slowing growth in China, and uncertainty about the federal budget deficit and tax increases have prompted businesses to be cautious about hiring. On Thursday, the Labor Department reported that 382,000 people filed jobless claims for the most recent week, more than economists had expected. The four-week average of claims is now at its highest level in three months.


In August, US employers added just 96,000 jobs, well below the pace of hiring during the first part of 2012. And while the nation’s unemployment rate dropped from 8.3 percent in July to 8.1 percent in August, that was mainly because many people gave up looking for work and were not counted among the unemployed.

The Massachusetts economy, however, continues to perform better than the nation as a whole, with unemployment well below the national average and its level a year ago, when the state unemployment rate stood at 7.4 percent. Over the past 12 months, employers have added 40,200 jobs in Massachusetts.

But the pace of hiring has steadily eroded over the past five months. And in August, the private sector in Massachusetts lost 8,200 jobs — the largest one-month decline in more than three years.

“It reflects a slowing economy,” said Northeastern University economist Alan Clayton-Matthews, who noted the financial problems in Europe in particular have hurt because the region accounts for 40 percent of Massachusetts’s exports.

The job losses hit most sectors — including educational services, retail, health care and social assistance, as well as professional, scientific, and business services.

Even the information sector — which includes many technology jobs and was long a bright spot for the state’s economy — lost 400 jobs in August.

By contrast, government agencies added 3,400 workers in August. Massachusetts officials cautioned that the increase in government hiring may have been skewed by seasonable adjustments and other factors.


Conversely, they also argued that the drop in private-sector jobs may not be as bleak as it seems, since the data reflect only a single month — and will almost certainly be revised later.

“I don’t think it’s worrisome,” said Joanne F. Goldstein, Massachusetts secretary of Labor and Workforce Development. “We see companies hiring all the time and looking for workers. We’re just not seeing any reason to think that we have to start worrying about the numbers.”

Todd Wallack can be reached at twallack@globe.com. Follow him on Twitter @twallack.