New England Economic Conditions through July 10, 2025

• New England experienced a year-over-year increase in the unemployment rate for May 2025 that was larger than the increase in the US rate. Among the New England states, Massachusetts had the largest increase.
• The region saw a decrease in its employment-to-population ratio over the 12-month period ending in May 2025.
• The labor force participation rate for New England rose slightly from a year prior. The increase was driven mostly by a relatively large rise in Massachusetts.

New England's unemployment rate for May 2025 increased 0.7 percentage point from a year prior, reaching 4.2 percent, the same level as the US rate for that month (Exhibit 4). The regional rate had been consistently below the national rate since December 2021.

Vermont had the lowest unemployment rate in the region for May 2025 and the third lowest in the country at 2.6 percent (Exhibit 5).³ Conversely, Rhode Island had the highest unemployment rate in the region and the fifth highest in the country at 4.9 percent. Among the New England states, the year-over-year increase in the unemployment rate ranged from 0.4 percentage point for Vermont to 0.8 percentage point for Massachusetts.

In May 2025, the employment-to-population ratio decreased 0.3 percentage point for New England and 0.4 percentage point for the United States from a year prior (Exhibit 6). The region saw a smaller decrease in the ratio because its population grew more slowly than the US population. Each New England state except Massachusetts experienced a drop in the ratio over the same 12-month period. At 1.2 percentage points, Rhode Island's decline was the largest in the region and larger than the drop in the US ratio.

Labor force participation in New England improved slightly in May 2025 compared with a year prior (Exhibit 7). It increased 0.3 percentage point, while the US rate decreased 0.2 percentage point over the same period. The rise in the regional rate was driven mostly by the 0.6 percentage point increase for Massachusetts, which partly explains why Massachusetts had a year-over-year increase in the unemployment rate that was the largest in New England and larger than the US increase. By contrast, Rhode Island had the largest drop in labor force participation in the region at 0.9 percentage point.