State unemployment rate falls to 6 percent, lowest rate in more than three years

The state unemployment rate in May fell to its lowest level in more than three years as Massachusetts employers added jobs for the sixth consecutive month, the state Executive Office of Labor and Workforce Development reported Thursday.

The jobless rate, which has declined steadily since last summer, dropped to 6 percent last month, from 6.3 percent in April, to reach the lowest level since September 2008. Employers increased payrolls by 7,500 jobs in May, after adding a revised 1,700 jobs in April.

“It’s clearly an encouraging report,’’ said Michael Goodman, an economic analyst and a professor of public policy at the University of Massachusetts at Dartmouth. “You are seeing some positive trends continue.’’


Massachusetts, buoyed by strong technology, health care, and education sectors, has generally recovered faster from the last recession than the nation as whole. The state has added nearly 38,000 jobs since the beginning of the year, an annual growth rate of more than 2 percent a year, compared to a national rate of about 1.5 percent.

State job estimates are frequently revised, and sometimes dramatically.

May was a disappointing month for the US economy as the financial crisis in Europe, a slowdown in China, and uncertainty about the durability of recovery weighed on employers. The nation added just 69,000 jobs last month while the unemployment rate rose for the first time in year, to 8.2 percent.

Despite the solid job gains in Massachusetts, there were also signs that uncertainty is creeping into hiring decisions here, posing the risk of another slowdown — or worse. While professional and business services led the state’s job gain in May, adding 6,000 jobs, much of those gains were driving hiring by temporary employment agencies.

That’s a sign that business are lacking the confidence to commit to permanent hiring, said Goodman. In addition, job growth in health care and higher education was essentially flat last month, possibly related to the unsettled budget situation in Washington. Both sectors rely on government funding for research and other activities.


Unless Congress acts before the end of the year, automatic, across-the-board budget cuts will go into effect and Bush-era tax cuts will expire — a so-called fiscal cliff that many economists say threatens the recovery. In a contentious election year, it remains unclear whether Congress will address these issues in time.

“This element of uncertainty may be making employers hesitate,’’ said Goodman.

Overall, economists viewed the May employment report as positive. The unemployment rate declined even as more people entered the labor force, an indication that some workers may be sensing an improving job market and resuming job searches.

Only those who are employed or actively looking for work are counted in the labor force.

Six of the 10 private employment sectors tracked by the state added jobs in May. In addition to professional and business services, and education and health services, which gained 200 jobs, trade, transportation, and utilities, which includes retailers, added 2,700 jobs last month.

Other services, which include personal and repair services, gained 1,100 jobs while information, a technology sector, added 700. Manufacturing added 100 jobs in May. Government also added 800 jobs.

Employment in financial services was flat. Leisure and hospitality, which includes hotels and restaurants, lost 2,300 jobs in May, while construction industry continued to struggle, shedding 1,700 jobs.

Construction employment has declined by 4,700 jobs, or more than 4 percent, over the past year.

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