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Mass. economic recovery shows weakness in May

Jobless rate falls, but fewer seeking work

By Katie Johnston Chase
Globe Staff / June 17, 2011

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Massachusetts continued its uneven economic recovery last month as employers cut payrolls last month and thousands of residents stopped looking for work — a sign that jobs are still hard to get.

The unemployment rate fell to 7.6 percent last month, the lowest level in more than two years, but the decline from 7.8 percent in April appeared largely driven by people giving up job searches, according to data released yesterday by the Executive Office of Labor and Workforce Development. Only those who actively seek work are counted as unemployed.

Employers, meanwhile, cut 4,000 jobs last month after adding about 20,000 in April.

“When you see this — the rate lower, jobs lower — it means there’s fewer people in the workforce,’’ said Andre Mayer, senior vice president of research at the Associated Industries of Massachusetts. “Until we begin to get the job machine going and create more jobs fairly steadily, we’re going to have a very difficult time breaking out of this rut of what is at best a slow and uneven recovery.’’

The state’s labor force shrunk by nearly 8,000 last month, a sign that the economy may not be generating enough jobs to lure people into the labor market, according to economists.

The weakness in May was consistent with recent forecasts of slowing economic growth in the state as national and global economies struggle under higher energy prices, European debt crises, and natural and nuclear disasters in Japan. Massachusetts is affected because many of its companies sell goods and services in national and international markets.

Last month, US employers added just over 50,000 jobs, while the national jobless rate rose to 9.1 percent from 9 percent in April.

Alan Clayton-Matthews, an economics professor at Northeastern University, said he doesn’t expect job growth to come to a halt in coming months, but it won’t continue at the same strong pace as earlier this year. Overall, the state’s economy has added 31,000 jobs since the beginning of 2011.

He added that months with big job gains, like April, are often followed by months with job losses as industries adjust hiring and estimates are corrected.

“We had very weak employment growth in the second half of 2010,’’ said Clayton-Matthews, “but it’s been very strong in the first five months of this year.’’

That job growth, however, has been uneven. Last month, for example, global demand for technology products and services helped drive gains in professional, scientific and technical services, and manufacturing. Construction, education, and health care also added jobs.

Sectors sensitive to consumer spending and energy prices shed jobs. Leisure and hospitality, which includes hotels and restaurants, retail, real estate, and transportation, warehousing, and utilities, all cut payrolls last month. Government cut 2,600 jobs.

Bruce Blake, laid off from a Cambridge software firm in March, said he has noticed a positive change in the job market recently. Blake, 47, of Allston, who has applied for dozens of jobs, said he has landed several face-to-face interviews.

“I see it as sort of an upward curve,’’ he said.

But other candidates haven’t noticed a difference. Eileen Carney, 55, of Winchester, has been looking for a permanent full-time job since she was laid off in 2007 from her job as a closed-caption writer for the WGBH Educational Foundation. She’s been getting by doing temp work, and isn’t technically considered jobless.

“I think there are a number people like me who are the hidden unemployed,’’ she said.

K atie Johnston Chase can be reached at johnstonchase@globe.com.