New England Economic Conditions through October 13, 2026

• Year-over-year payroll employment growth in August 2026 remained modest but positive in both New England and the United States, indicating a recovery from the region's net job loss and the nation's near-flat growth in 2025.
• The educational and health services sector remained New England's top driver of employment growth, but manufacturing emerged as a noteworthy secondary contributor, adding 10,500 jobs across the region despite its historically weak growth trend.

In August 2026, total nonagricultural payroll employment grew 0.4 percent year-over-year in the United States and 0.3 percent in New England (Exhibit 1). These modest but positive growth rates signal a recovery from 2025, when both the nation and the region recorded some of their weakest job gains since June 2011-employment growth in the United States was nearly flat, while New England experienced a net job loss (Exhibit 2). This employment recovery aligns with trends in job openings nationally. After declining steadily from March 2022 through December 2025, job openings began rising again in 2026, suggesting employers are moving past the "no-hire, no-fire" stance that characterized the 2025 labor market and becoming more willing to expand their headcounts (Exhibit 3).

In New England, the educational and health services sector remained the region's primary post-pandemic driver of employment growth, expanding 1.7 percent (28,000 jobs) from August 2025 through August 2026 (Exhibit 4). Manufacturing, a sector in which the average employment growth rate over the past decade ranks among the lowest of any private industry in New England, emerged as the second-largest contributor, adding 10,500 jobs over the same period. Connecticut, Massachusetts, and Rhode Island all posted notable gains, ranging from 1,300 jobs in Rhode Island to 4,100 in Massachusetts and 4,500 in Connecticut. By contrast, the trade, transportation, and utilities sector, the information sector, and the finance, insurance, and real estate sector each lost from 3,900 to 6,800 jobs, continuing the downward trends observed over the past three years.