Massachusetts jobless rate inches down in January; labor force participation unchanged

The Massachusetts unemployment rate fell six-tenths of a percentage point to 7.8% in January, according to figures released Friday by the Executive Office of Labor and Workforce Development and the federal Bureau of Labor Statistics.

Preliminary estimates show that Massachusetts gained 35,500 jobs in January. This followed a December loss of 8,700 jobs.

Over the month, the private sector added 26,300 jobs as gains occurred across all sectors, led by education and health services and professional, scientific and business services.

The state’s labor force participation rate — the total number of residents 16 or older who worked or were unemployed but actively sought work in the last four weeks — remained unchanged at 66.5%. Compared with pre-pandemic January 2020, the labor force participation rate is down one-tenth of a percentage point.

The January unemployment rate was 1.5 percentage points higher than the national rate of 6.3% reported by the Bureau of Labor Statistics for that month.

The most recent national unemployment rate is 6.2%, released March 5 and related to data collected in February. But state-level data lags and February numbers won’t come out for a few weeks. Numbers are also delayed because February is a short month.

The statistics come from two sources. Jobless numbers come from a survey of households and employment numbers come from a survey of employers. That means the number of jobs can lag because new companies are not included in the survey.

The Massachusetts labor force increased by 3,600 from 3,753,100 in December, as 23,300 more residents were employed and 19,700 fewer residents were unemployed over the month.

Massachusetts’ unemployment rate was about 2.9% before the coronavirus pandemic, a level most economists believe indicates full employment. The rate ballooned to 16% in April 2020.

From January 2020 to January 2021, the Bureau of Labor Statistics estimates Massachusetts lost 334,200 jobs. Losses occurred in each of the private sectors with the exception of mining and logging. The largest percentage losses were in leisure and hospitality, with 32.8% of jobs lost; other services, with 18.7% of jobs lost; and education and health services, with 8.7% of jobs lost.

Here is a breakdown of job losses and gains by sector:

  • Professional, Scientific and Business Services gained 4,600 (+0.8%) jobs over the month. Over the year, Professional, Scientific and Business Services lost 25,000 (-4.1%) jobs.
  • Trade, Transportation and Utilities added 3,100 (0.6%) jobs over the month. Over the year, Trade, Transportation and Utilities lost 27,700 (-4.8%) jobs.
  • Construction added 1,800 (+1.1%) jobs over the month. Over the year, Construction has lost 1,600 (-1.0%) jobs.
  • Manufacturing lost 600 (-0.3%) jobs over the month. Over the year, Manufacturing lost -13,500 (-5.6%) jobs.
  • Financial Activities gained 2,100 (+1.0%) jobs over the month. Over the year, Financial Activities lost 4,600 (-2.1%) jobs.
  • Leisure and Hospitality gained 1,900 (+0.7%) jobs over the month. Over the year, Leisure and Hospitality lost 125,400 (-32.8%) jobs.
  • Education and Health Services gained 10,000 (+1.4%) jobs over the month. Over the year, Education and Health Services lost 71,900 (-8.7%) jobs.
  • Information gained 1,900 (+2.2%) jobs over the month. Over the year, Information lost 6,500 (-6.9%) jobs.
  • Other Services gained 1,400 jobs OTM (+1.2%) jobs over the month. Over the year, Other Services are down –26,500 (-18.7%) jobs.
  • Government gained 9,200 (2.2%) jobs over the month. Over the year, Government lost 31,600 (-6.9%) jobs.

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