Mass. unemployment rate drops to 4.9% in February

The state unemployment rate dropped below 5 percent last month for the first time since 2008 as the state economy shook off record snows, more residents found jobs, and employers faced a harder time recruiting workers.

Unemployment in Massachusetts fell to 4.9 percent in February, the lowest rate since March 2008, not long after the last recession began, the state Executive Office of Labor and Workforce Development reported Thursday. The jobless rate has plunged nearly 4 percentage points from a peak of 8.8 percent in 2009 and more than a point from its level a year ago.

The state economy has been supported by its strong technology and life sciences sectors, growing consumer confidence and spending, and a strengthening US economy. Although wages overall have remained mostly flat, rising stock and home values have restored household wealth, said Alan Clayton-Matthews, an economics professor at Northeastern University.


Clayton-Matthews said the economy appears to have entered a self-sustaining cycle that economists call a “virtuous circle” in which rising employment leads to increased consumer spending, which in turn leads to more hiring.

“All that reflects confident households now supporting the economy,” Clayton-Matthews said.

The falling unemployment rate is making it harder for businesses to find employees, and many long-term unemployed are getting another look. Joseph Couture, 62, a sales manager who was unemployed for 35 months, recently found a job with Sig Sauer, at the gun manufacturer’s warehouse in Exeter, N.H.

“I feel good about coming into work every day,” said Couture, who said he is optimistic about his prospects at his new company. “I’ve been working there for almost four weeks now, from 7 to 3:30. And I’ve been having a lot of overtime, too.”

Temp agencies say they are having to spend more money to recruit workers, who are being hired on a permanent basis more frequently than in recent years. Al Cotton, a spokesman for Nypro, a Clinton plastics manufacturer owned by Florida-based Jabil Circuit Inc., said his company has had to lean on temporary labor and partnerships with community colleges to fill jobs.


“I’d say the pressure is on,” Cotton said. “We have big accounts with big companies that have big needs.”

That pressure could eventually mean higher pay for workers. Wage growth has been sluggish since the end of the recession. But with more positions unfilled, some companies are finding they have no choice but to pay more.

The Paper Store, an Acton-based gift retailer with locations across the Northeast, said it has to pay 10 to 15 percent over the minimum wage for talented salespeople who once worked for the minimum wage.

“Before, the market was flooded with a lot of qualified candidates, sometimes even overqualified candidates,” said Tom Anderson, the company’s chief operating officer. Now, he said, “we’ve spent more dollars on radio, we’ve spent more dollars on recruiters, we’ve done more job fairs. In the past, I could have done all my recruiting on Craigslist.”

Massachusetts employers added a net 800 jobs in February, after increasing payrolls by 900 jobs in January, the state reported. Job growth was mixed last month, as some sectors were apparently affected by record snow. Transportation, trade, and utilities, which includes retailers and shippers, lost 3,200 jobs last month. Construction shed 900 jobs.

Professional, scientific, and business services, however, added 2,600 jobs last month. Government added 1,600.


“What we’d hope to see is a little pickup in hiring in March and April,” said Daniel Hodge, an economist who leads the UMass Donahue Institute.

Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.