Massachusetts employers added 1,600 jobs in July, but the state’s unemployment rate ticked up slightly for the first time in three years to 6.1 percent, according to a Bureau of Labor Statistics report released by the Patrick administration Aug. 16.
A previously reported 2,600 job loss in the month of June was also revised to reflect a 600 job gain in that month.
“These numbers are a snapshot, and we always urge people to look at the trends and not the snapshot. The gain was the sixth straight month of growth in the Commonwealth, which I think shows we are making steady progress,” said Secretary of Labor and Workforce Development Joanne Goldstein.
The last time the state’s unemployment rate rose was in September 2009. Despite the July increase by one-tenth of a point from 6 percent, the state’s unemployment rate is still well below the national 8.3 percent average.
“I don’t think it indicates necessarily that the economy is slowing down. We’re still growing jobs and we’re comfortable that we are continuing to grow in the right direction,” Ms. Goldstein said.
The largest job gain, according to the administration, came in the education and health services sector, which added 4,000 jobs in July. Professional, scientific and business services, construction and manufacturing also added jobs last month, boosting employment numbers by 1,000, 900, and 100 respectively.
The jobs numbers were released on the same day the Massachusetts Clean Energy Center reported that the clean energy economy grew 11.2 percent from July 2011 to July 2012. The sector now employs 71,523 people at 4,995 clean energy firms across Massachusetts and represents 1.7 percent of the state’s workforce.
The leisure and hospitality sector lost 1,600 jobs last month, according to the new report, while trade, transportation and utilities lost 1,100 jobs, financial activities lost 1,000 jobs, and other services lost 1,100 positions.
“Leisure and hospitality I found puzzling,” Ms. Goldstein said. “Anecdotally and factually it’s doesn’t seem like it’s slowing down.”
Government was another sector that added jobs in July, with state government posting a 600-job gain, the federal government adding 100 jobs and local governments downsizing by 200 jobs.
The unemployment rate is based on a monthly sample of households. The job estimates are derived from a monthly sample survey of employers.
Cape and Islands up
Though unemployment ticked up in July, the seasonally unadjusted unemployment rate is down in the Cape and Islands as well as in Amherst, according to the Office of Labor and Workforce Development. The unemployment rate is up in 17 areas throughout the state but down in the Barnstable, Amherst, Nantucket and Tisbury areas, while it is unchanged in the North Adams area.
The summer vacation season on Cape Cod has apparently driven that region’s economy, as the state noted, “The Barnstable area had the largest over the month rate of job growth due to seasonal gains.” The Cape and Islands rates are dramatically lower than other areas of the state, such as Bristol County, which had a 9 percent unemployment rate in July, down from 9.9 percent in July 2011 but up from 8.5 percent in June. Martha’s Vineyard had a rate of 3.8 percent, Nantucket a rate of 2.9 percent and Barnstable County had a rate of 5.4 percent. While the seasonally unadjusted July unemployment rate went up from 6.3 percent to 6.6 percent from June, all of the states’ 14 counties had a decrease in that rate from July 2011 to July 2012 with the biggest drop in Plymouth County.
The Brockton workforce investment area was the region with the biggest drop in year-to-year unemployment. From June to July, the area that had the biggest drop in employment was the Central Massachusetts workforce investment area, where the June to July employment numbers fell from about 275,000 to 269,000. The Cape and Islands workforce investment area’s June-to-July employment numbers went up by a larger amount, rising from about 144,400 to 152,300. The statewide seasonally adjusted unemployment went up from 6 percent in June to 6.1 percent in July.
Over time
Andre Mayer, senior vice president for research at Associated Industries of Massachusetts (AIM), said it’s more valuable to look at the job growth trends over time than to try to try to read too much into a single month’s job report.
“The little uptick in the unemployment rate means nothing. What we’re seeing is very slow improvement, slow job creation but fairly consistently positive,” Mr. Mayer said.
After dropping off sharply in June, AIM’s business confidence index rebounded part of the way, jumping 3.9 points in July to 52.2 and climbing back into positive territory.
“While there is a lot of uncertainty and concerns, the underlying pattern has been positive,” Mr. Mayer said. “Employers are very aware of the risks out there in the economy, the connection to Europe, which is moving into a recession, the so-called fiscal cliff that the people in Washington are dealing with and that certainly holds hiring back. We’ve never gotten to the point in this recovery that employers felt confident enough in the direction — therefore they’ve been reluctant to hire.”
Calling the overall recovery “a long slog,” Mr. Mayer said July, like January, is typically one of the most difficult periods for seasonally adjusted job growth, and the report reflects weak youth hiring and uneven employment in the summer construction industry.
The strength in the professional, scientific, and business services sectors, he said, stems from the fact that those fields tend to have to hire more people if companies are doing more business, as opposed to manufacturing, where increased productivity can be squeezed out of the existing workforce.
The July Bureau of Labor Statistics report found that 3,240,400 residents of Massachusetts were employed out of a total labor force of 3,451,300.
