Massachusetts is Missing from New England’s Job Growth Trends

Does it feel like Massachusetts’ economy is slowing down? You’re not imagining it.

According to comprehensive new data covering through the first quarter of 2025, the Bay State’s private sector employment has dropped even further since 2024, remaining far below pre-COVID levels. Translation: Private sector job trends could be worse than previously thought.

Let’s take a closer look at why this matters and what it means for Massachusetts.

New Data Show Mass Has Fallen Behind New England and Competitor States—Again

The new data BLS released this month paints a bleak picture for Massachusetts. Not only are total private sector job trends still below pre-COVID levels, Massachusetts jobs have further declined through the first quarter of 2025.

Compared to pre-COVID levels in January 2020, Massachusetts has had net losses of nearly 37,000 private sector jobs five years later, representing 1.2% of total private employment. Connecticut, Maine, New Hampshire, and Rhode Island have all added jobs since 2020.

Meanwhile, key competitor states such as Florida and North Carolina are soaring even higher past Massachusetts, with both seeing double or triple the rate of New England’s private sector job growth over the last five years.

Zooming in on the last twelve months, the situation looks even more dire. While job levels fluctuate based on a variety of factors—including state and federal policy changes—Massachusetts is still losing ground compared to other states.

In ten of the last 12 months of available BLS data, Massachusetts experienced monthly job levels lower than those in the same month last year. This negative trend far surpasses other New England states – Vermont, for example, experienced only three out of 12 months with year-over-year job losses. Competitor states North Carolina and Florida have also seen strong monthly job gains.

Key Industries Are Driving Job Losses while the Public Sector Adds Jobs

Earlier this year, Pioneer Institute reported Massachusetts was one of just four states to lose private sector employment since 2020, based on the BLS monthly data available at the time.

Pioneer’s employment analysis indicated troubling trends in several key industries in Massachusetts. According to the latest BLS data, several of Massachusetts’ industries have been driving the job losses. From January 2020 to January 2025:

• Retail trade lost nearly 27,300 jobs (-7.8% of jobs in the industry),
• Manufacturing lost more than 14,300 jobs (-5.9%), and
• Accommodation and food services lost nearly 18,000 jobs (-6.0%).

Even one of our bread-and-butter industries – professional, scientific, and technical services – has not been immune to declines. While the industry did gain some jobs following COVID, it reached an employment peak in 2022 and has lost more than 14,600 jobs since (-3.8% of jobs in the industry).

Some industries, such as education and healthcare, added jobs during this period. Notably, state and local government administration employment has also increased over the last five years by roughly 7,900 added jobs, a 6.6% jump.

Factors Driving Massachusetts’ Job Losses

Massachusetts’ economy has a lot going for it, including a deep talent pool and highly educated workforce, high density of higher education and research institutions, and a focus on investing in innovation and technology.

So what could be driving such wide job losses over the last few years?

To be sure, an economy disruption as large as the COVID pandemic can cause shocks, including for those industries engaging in customer service or with more in-office employees. Additionally, recent federal funding cuts and new tariffs may be driving pessimism about the future of the economy that leads employers to avoid expansion or even limit operations.

But additional data shows Massachusetts’ resident workforce may be choosing to leave the state for better quality of life. In the latest-available data on tax returns by the Internal Revenue Service, Massachusetts saw a net outmigration of 45,000 residents in 2022. In a survey of those who moved out of Massachusetts in the last several years, MOA found two-thirds said the Commonwealth’s high cost of living (including high taxes) was a primary reason. Another recent MOA poll shows the rising cost of housing is another specific concern.

These economic factors are making Massachusetts less competitive for job seekers and residents, and may be driving the state’s relative decline in private sector growth.

Conclusion

The latest BLS data signals that Massachusetts is losing ground in private-sector employment while our competitors are accelerating. There are various factors that can cause employment losses, and industries change over time, but Massachusetts’ negative trend while neighbors and economic competitors is cause for concern. Most recently, Cambridge-based Biogen announced it would be expanding operations in North Carolina, rather than their existing locations in Massachusetts.

This month, Hasbro announced it would open a new corporate headquarters that would create an estimated 700 new jobs here. It’s a win for Massachusetts, but overall declining private employment trends signal a larger economic problem: it has gotten harder to do business, raise a family, and thrive in Massachusetts than it was five years ago.

Unless the state can find ways to boost business and employment growth, the gap between Massachusetts and its peers will only widen, making it harder to attract workers, families, and businesses in the years to come.