• Nonfarm payroll employment in New England continued to grow in November 2023, although at a decelerating rate. The educational- and health-services sector led all sectors in the region with a year-over-year increase of more than 3 percent. On the other hand, New England’s information sector lost 2 percent of its employment from a year prior.
• The downward trend in the job openings rate since 2022 continued through October 2023, signaling a gradual cooling of demand for labor. Most New England states also saw more layoffs and discharges than a year prior.
• New England had a lower unemployment rate for November 2023 than the other census divisions. The unemployment rates of Vermont, New Hampshire, Massachusetts, and Rhode Island were among the country’s 10 lowest.
• The labor force participation rate for New England has largely stagnated since 2021 and remained below its February 2020 level in November 2023. However, for the first time since the onset of the COVID-19 pandemic, the region’s labor force participation rate for prime-age workers (aged 25 to 54) exceeded the February and March 2020 rates.
• The Boston area has seen a steady decrease in overall inflation since September 2022. The Consumer Price Index for Boston increased only 2.4 percent from November 2022 to November 2023. Boston’s shelter prices rose 7.1 percent, while prices for fuels and utilities dropped 14.3 percent during the 12-month period.
• New England saw stronger growth in house prices compared with other regions, with a year-over-year appreciation rate of 9.3 percent through the third quarter of 2023. However, both downtown and suburban Boston saw rising office vacancy rates in 2023:Q3.

• Year-over-year employment growth slowed in New England for November 2023. The information sector contributed to the deceleration by losing 2 percent of its employment from a year prior.
• Job openings rates continued trending downward in the region, and four of the New England states saw an increase in the rate of layoffs and discharges compared with 12 months ago.

Year-over-year employment growth continued to decelerate both in New England and across the United States (Exhibit 1). Nevertheless, the region posted a 1.5 percent increase in employment for November 2023, slightly lower than the US rate of 1.8 percent. Within the region, Rhode Island was the only state that had negative year-over-year job growth (–0.2 percent).¹

A decomposition of the employment change in New England by supersector shows that the educational- and health-services sector led all sectors with an increase of more than 3 percent from November 2022 to November 2023 (Exhibit 2). The information sector lagged the most over that period, with a 2 percent loss.

Both the regional and national employment figures for November 2023 exceeded pre-pandemic levels (Exhibit 3). However, New England’s employment growth since February 2020 remained behind that of the nation. The employment levels for Rhode Island and Vermont were still down more than 2 percent compared with February 2020.

Professional and business services and construction are the region’s two leading supersectors in terms of job growth since February 2020 (Exhibit 4). By contrast, employment in New England’s government, manufacturing, other services, and leisure and hospitality supersectors has not recovered fully. Leisure and hospitality employment in the region remained 5 percent below its pre-pandemic level compared with a 1.2 percent deficit nationally.

As another sign of labor market cooling down, job openings rates continued a downward trend, inching closer to pre-pandemic averages both in the region and across the nation (Exhibit 5). Meanwhile, four of the New England states—Connecticut, Maine, Massachusetts, and Vermont—saw a hike in the layoffs and discharges rate compared with a year ago (Exhibit 6). 

• New England’s unemployment rate for November was lower than a year ago, and it was lower than the other census divisions’ rates.
• The labor force participation rate for New England prime-age workers (aged 25 to 54) returned to the pre-pandemic level, although total labor force participation remained below the February 2020 level.
• New England’s employment-to-population ratio still lagged its pre-pandemic level.

Every New England state saw its unemployment rate decline from November 2022 to November 2023 (Exhibit 7). By contrast, the US unemployment rate increased slightly from a year ago.

New England had the lowest unemployment rate for November 2023 across nine census divisions. Vermont, New Hampshire, Massachusetts, and Rhode Island were among the states with the 10 lowest unemployment rates in the country that month.²

Labor force participation in New England and the United States remained below the February 2020 levels, although the rates for the region and country have been following different trajectories since 2021 (Exhibit 8). The US labor force participation rate has been slowly and steadily recovering, while the New England rate has largely stagnated. Across age groups, labor force participation among prime-age workers (aged 25 to 54) in the region in November exceeded the rates for February and March 2020 for the first time since the onset of the COVID-19 pandemic (Exhibit 9).

In addition, the employment-to-population ratio for November 2023 still lagged pre-pandemic levels, with a larger gap for New England than for the United States (Exhibit 10). This is because the region’s number of employed workers (that is, the ratio’s numerator) shrank 1.4 percent from February 2020, while the civilian noninstitutional population (that is, the ratio’s denominator) increased 1.4 percent over this period.³

• Boston’s overall inflation continued a downward trend, dropping to 2.4 percent for November 2023.
• Boston’s overall inflation was driven mostly by a 7.1 percent year-over-year increase in shelter prices, while prices for fuels and utilities decreased 14.3 percent .

Since September 2022, overall inflation in the Boston area has steadily declined (Exhibit 11). The year-over-year change in the Consumer Price Index (CPI) for Boston fell to 2.4 percent for November 2023, which was 0.7 percentage point lower than the US rate for the same month. Core CPI for Boston increased 3.4 percent from a year prior (Exhibit 12). (Core CPI omits food and energy prices, which tend to be more volatile than prices of other items.)

Shelter prices played a critical role in Boston’s recent inflation. They increased 7.1 percent on a year-over-year basis. Food prices also rose 5.3 percent during the 12-month period ending in November 2023. These increases were partially offset by a 14.3 percent decrease in prices for fuels and utilities. While not shown in Exhibit 12, that decrease was driven by a 20.3 percent decline in electricity prices and a 7.5 percent decline in utility gas service prices.⁴ In addition, gasoline prices—a sub-category within transportation—dropped 8.5 percent in the Boston area.

• New England saw stronger year-over-year house-price growth compared with the rest of the country for 2023:Q3.
• The office vacancy rate continued to rise in both downtown and suburban Boston.

House prices increased in all nine US census divisions both quarter-to-quarter and year-over-year for the third quarter of 2023. The year-over-year appreciation for New England was 9.3 percent (Exhibit 13), which was the highest among all census divisions. Four New England states—Vermont, Maine, New Hampshire, and Connecticut—posted a year-over-year appreciation that was close to or greater than 10 percent and claimed the top four spots nationwide in house-price-growth rate from 2022:Q3 to 2023:Q3. The Federal Housing Finance Agency attributed the strong national house-price growth to a low inventory of houses on the market.⁵

By contrast, the office market further softened both in the Boston area and across the country. The 2023:Q3 office-vacancy rates in both downtown and suburban Boston increased from a quarter ago and from 2022:Q3 (Exhibit 14). Nevertheless, they remained lower than the downtown and suburban rates for the United States.