State’s unemployment rate rose to 6.3 percent in August as local economy lost 4,800 jobs

The Massachusetts unemployment rate inched up to 6.3 percent in August, up from 6.1 percent in July and 6.0 percent in June, the latest sign of the state’s slowing economy.

The state Executive Office of Labor and Workforce Development reported Thursday that the state shed 4,800 jobs last month --- a sharp turn around from the beginning of the year when the state was adding nearly 10,000 jobs a month. The state also reported that the state gained fewer jobs than initially thought in July.

The sluggish growth mirrors the slowdown in the national economy, which has been hurt by the debt crisis in Europe, slowing growth in China, uncertainty about key policies in Washington with the upcoming November elections, and continued gridlock in Congress. All of those factors have combined to make employers cautious about hiring. Nationally, employers added just 96,000 jobs last month, below expectations and less than half the average number added in the first three months of the year.

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Still, the latest state unemployment of 6.3 percent remains significantly lower than the national average. The US unemployment rate dropped from 8.3 percent in July to 8.1 percent in August, mainly because many people gave up looking for work.

The latest state unemployment rate of 6.3 percent also remains significantly lower than it was a year ago when it stood at 7.4 percent. Over the past 12 months, the state has created 40,200 jobs.

But last month, job losses rippled throughout the state’s economy—including losses in educational services; construction; leisure and hospitality; retail trade; health care and social assistance, and professional, scientific, and business services. Even the information sector --- which includes tech jobs and was long a bright spot for the state’s economy --- lost 400 jobs in August.

By contrast, state and federal government agencies added thousands of workers in August, offsetting a small drop in local government employment. Overall, government added 3,400 jobs last month. The financial activities sector and mining and logging industries together added another 400 jobs.

In addition, the state revised the July job numbers downward. The state reported Thursday that the state gained just 300 jobs in July, down from the initial estimate of 1,600.