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Massachusetts unemployment rate hits six-year low

The Massachusetts Executive Office of Labor and Workforce Development recently reported that the state's economy added a total of 3,700 jobs during June, causing its unemployment rate to drop to 5.5 percent. The estimate from May was also revised upward to account for almost 1,000 previously unrecorded jobs. These gains brought the year-over-year job creation total in the state to almost 50,000.

The state noted that were wide discrepancies between sectors in June, with the greatest gains seen in education and health services. That sector, a cornerstone of the Massachusetts economy, added about 6,000 jobs over the course of the month. Over the last year, job gains in this sector have exceeded 20,000.

Performance was less impressive in other sectors. Considerable gains were seen in trade, transportation and utilities, and government, while employment in financial activities was essentially unchanged. All of the other sectors tracked by the state showed modest declines, including leisure and hospitality, manufacturing and construction.

Employment picture remains mixed at national level

The national unemployment rate has also continued a downward trend and currently sits at 6.1 percent. The rate is widely expected to continue dropping for the foreseeable future. For example, a recent survey of the members of the Federal Reserve Board and the presidents of the regional Fed banks predicted that the U.S. unemployment rate will drop to between 5 and 5.6 percent during 2016. Broader polls of economists point to the national rate settling between 5 and 6 percent in the coming years.

According to data compiled by the Washington Post, 14 states' unemployment rates have already dropped to 5 percent or lower. During the past year, 34 states have seen statistically significant declines in unemployment, while no states experienced a meaningful increase in their rate. Citing data from the U.S. Bureau of Labor Statistics, the Post noted that the largest drops were reported in South Carolina, Nevada and Illinois, each of which saw unemployment fall by more than 2 percentage points. However, the latter two still have among the highest rates in the nation, with 7.7 and 7.1 percent unemployment, respectively.

Despite improvements, it is clear that the job market will remain challenging for some time to come. The Wall Street Journal highlighted a report from the Boston Consulting Group, which used demographic and economic forecasts developed by the United Nations to predict that as much as 10 to 13 percent of the U.S. labor force could be surplus in 2020, with that figure falling to between 4 and 11 percent by 2030.