Business & Tech

Mass. unemployment rate rises to 3.6 percent

AP Photo/Wilfredo Lee, File

Was March a simple breather after an exuberant few months of hiring or a worrying sign of a slowing Massachusetts economy?

After adding 30,000 new jobs since the presidential election, employers in Massachusetts expanded payrolls by a meager 200 positions in March. The state unemployment rate ticked up to 3.6 percent from 3.4 percent in February, the Massachusetts Executive Office of Labor and Workforce Development said Thursday.

Monthly data can fluctuate, and economists and business leaders said it will be important to see what happens in the coming months, but there are some signs that the state economy is softening.

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Nationally too, employment growth in March proved to be disappointing with the economy adding just 98,000 jobs, far below the 180,000 jobs labor experts had predicted.

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Difficulty finding the right workers in a tight labor market, along with uncertainty about whether the Trump administration and the Republican Congress can pass their probusiness agenda after the recent failure to change the health care law, may be causing companies to hit pause, economists said.

“Seeing this one month certainly raises eyebrows,” said Chris Geehern, an executive vice president of the Associated Industries of Massachusetts, a business group that represents many employers.

“It’s not a a panic type of thing, but there is a deceleration. . . . All those issues swirling around D.C. will affect employers. They may want to see a clearer playing field before they expand,” Geehern said.

Still, employers are also facing other everyday challenges that could be holding down job growth.

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Unemployment remains low — in Massachusetts, it’s almost a full percentage point below the national average of 4.5 percent in March. But even with more people coming back into an improved labor market, they aren’t necessarily available candidates, said Alan Clayton-Matthews, an associate economics professor at Northeastern University.

The number of residents 16 years or older who worked or were actively looking for work increased by nearly 1 percentage point compared with March 2016, according to the state.

“We’ve been expecting a slowdown in hiring simply because there’s a looming shortage of workers,” Clayton-Matthews said. “There is the labor force restraint.”

Earlier this month in its latest survey of businesses in Boston and New England, the Federal Reserve noted that hiring struggles continued to hamper companies.

One firm that has been expanding its labor force because of a new product said nearly two thirds of applicants for assembly line jobs were screened out because they failed the math and drug tests, and that of the 400 workers who were hired, only 180 of them worked out.

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“What we hear from our clients is that they have jobs openings but the candidates don’t have the right skills sets, from truck drivers to software application developers,” said Paul Bolger, president of Massachusetts Capital Resource Co., which invests in mid-sized companies throughout the state.

Still businesses remain upbeat, though perhaps their hopes for health care overhaul, significant government investment in infrastructure and a friendlier tax system have been tempered by the political gridlock in Washington.

Bruce Van Saun, chief executive of Providence-based Citizens Financial Group Inc., said the bank fielded plenty of commercial loan inquiries from clients earlier this year, but companies have been more reluctant to take out large loans and invest in expansions.

Businesses are borrowing to lock in lower rates and fees, but not necessarily plowing money into more positions, new equipment or bigger plants, he said.

“With the initial outcome after election, I think there was a real heightened sense of optimism and confidence that we’d get a higher growth rate in the economy,” Van Saun said.

“The optimism is still there, but it hasn’t translated into action. The key question for the second half of the year is, will the optimism hold,’’ he said.

Clayton-Matthews said he expects Massachusetts employers to continue adding jobs, but he predicts at a more measured pace

“It will pick up, but at a slower rate than before,” he said.

Deirdre Fernandes can be reached at deirdre.fernandes-@globe.com. Follow her on Twitter @fernandesglobe.