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Mass. unemployment rate at lowest point since 2001

A sign reading, “We’re Hiring!” was seen inside of the Roche Bros. store in Acton. JESSICA RINALDI/GLOBE STAFF

With the state’s economic engine firing on nearly all cylinders, the jobless rate fell last month to its lowest level in 15 years.

Unemployment in Massachusetts eased to 3.9 percent in August from 4.1 percent the prior month, the state reported on Thursday. Employers added 5,900 jobs last month, primarily in leisure and hospitality, education, and health care. Since the start of the year, most industries have added workers or kept their payrolls stable.

The last time the state’s jobless rate was that low was in August 2001, just before the terrorist attacks, and it dipped as low as 2.6 percent during the dot-com boom of 2000.


“Wow. It’s unequivocally a positive job report,” said Mike Goodman, a public policy professor who studies the state’s economy at the University of Massachusetts Dartmouth.

“I would be most concerned about the most rapidly growing employers in the most rapidly growing areas of the state being able to staff,” he added.

Companies are holding on tightly to the workers they have, said Alan Clayton-Matthews, an economics professor at Northeastern University. The number of Massachusetts residents filing for unemployment assistance dropped to 24,000 in July, the lowest it had been since October 2000, he said.

Employers have shifted strategies in how they hire, not just in the high-demand technology sector, but even for more entry level and middle-income jobs in finance and health care, recruiters said. They are more willing to bet on candidates who don’t have all of the skills they need and train them — a strategy unheard of just a few years ago, when workers were plentiful and companies could be picky.

Some employers have increased salaries or are offering current employees thousands of dollars in bonuses for recruiting new hires.

“The demand for qualified talent is through the roof, and the talent is minimal,” said Stu Coleman, a partner at WinterWyman, a recruiting and staffing firm in Waltham. “It’s a different economic world.”


In New Hampshire, where the job market is traditionally tighter than in Massachusetts, the jobless rate was 3 percent in August.

In Rhode Island, where the economy has struggled to replace manufacturing jobs, the rate was 5.6 percent.

So far, they are the only other New England states that have reported employment data for last month.

As the job markets tightens, economists expect that wages will increase more robustly, too. Median household income in Massachusetts rose by only 2 percent last year — nearly half the national rate, according to data released by the Census Bureau this week.

Frederick Goff, chief executive of Jobcase.com, a Cambridge company that connects workers and employers in lower-skilled fields, said he is seeing more people hunting for new positions that will increase their wages, shorten their commutes, or ensure they have friendlier co-workers.

“The power is starting to shift a little bit from employer to labor,” Goff said.

The Massachusetts unemployment rate is now below what most economists consider full employment. It is also a whole percentage point below the national average of 4.9 percent, which is low enough for the Federal Reserve to take a hard look at raising interest rates to keep inflation in check.

But despite the low unemployment rate and increasing number of workers finding jobs, the Massachusetts economy may not be as strong as it was in previous boom times and is probably contributing to the unease many people feel about the recovery, Clayton-Matthews said.


The number of workers in the state who are working part time but want full-time work and are discouraged by the labor market remains stubbornly high.

In Massachusetts, the underemployment rate is 8.5 percent, higher than the 7.1 percent it was at the same time in 2007, before the recession, Clayton-Matthews estimated.

And the employment rate for men and for nonwhites and Hispanics in Massachusetts has not rebounded since the recession. Only 66.3 percent of the state’s men are employed, compared with nearly 71 percent in 2007. Employment rates for minorities dropped to nearly 59 percent in August, from 63 percent before the recession, Clayton-Matthews said.

“Many people feel left out or left behind by the economy,” he said.

Still, economists this time around don’t expect a big bust like Massachusetts experienced in the early 1990s and early 2000s, because growth has been fairly slow.

As the economy stabilizes and more workers find jobs, state officials are trying to focus on skills training to ensure that more residents are sharing in the economic recovery, they said.

“There are still 140,000 unemployed in Massachusetts,” said Ronald Walker II, secretary of the Executive Office of Labor and Workforce Development.

“We still want to make sure every citizen in the Commonwealth has an opportunity to participate in this growth.”

Deirdre Fernandes
can be reached at deirdre.fernandes@globe.com.