Fed economist tells Central Mass. business leaders threat of a recession has decreased, but uncertainty remains
Photo | Eric Casey
Mary Burke, senior economist and policy advisor with New England Public Policy Center at the Federal Reserve Bank of Boston, speaks at WBJ's annual Economic Forecast Forum.
The threat of a looming recession is weakening, but much economic uncertainty remains as financial experts attempt to predict what’s ahead in 2024, according to a leading economic expert.
On a more local level, labor participation in Massachusetts has still not returned to pre-COVID levels, with the hospitality industry struggling in particular to fill jobs, said Mary Burke, senior economist and policy advisor with New England Public Policy Center at the Federal Reserve Bank of Boston. Burke made these statements Thursday as the keynote speaker of WBJ’s annual Economic Forecast Forum, which is put on in conjunction with the Worcester Regional Chamber of Commerce.
Speaking about the previous year, Burke said the economic growth seen in 2023 was surprising, helping prevent a predicted recession.
Just like some of the national figures, Massachusetts-related statistics are presenting mixed signals to economists, Burke said. One thing hurting the commonwealth’s economic growth is the exodus of workers to other states.
“One issue in Massachusetts is that we’ve seen many workers leave the state for other states. That is seen as sort of a long-term trend that’s been a drag on growth.” said Burke, noting many Massachusetts workers have remained in New England but have moved to places like Maine and New Hampshire.
This is a structural problem for the state, but one that could be partially addressed by bringing in more international workers, Burke said.
Labor costs are higher in New England than in other areas of the country where Worcester manufacturer Polar Beverages operates, said Ralph Crowley, Jr., president and CEO of Polar, who spoke during an Economic Forecast panel discussion following Burke’s keynote address.
The quality of workers is still very strong in Central Massachusetts, said Crowley, although Polar is having a hard time finding workers, with applicants not showing up for interviews.
“We’re still getting ghosted,” he said.
A lack of available workforce is hurting the healthcare industry, too, Rozanna Penney, president & CEO of Heywood Healthcare in Gardner, said during the Economic Forecast panel.
“People are leaving health care in droves,” said Penney.
Heywood will post job openings with $25,000 sign-on bonuses and still receive zero applications, she said.
On a more positive note, inflation in the region has been much tamer recently, said Burke, with New England’s rate hovering around 2%, lower than the national average.
Looking ahead to 2024, Burke said that the looming threat of an actual recession seems to have diminished, but consumers might still feel like the economy is not where it should be.
“You talk to a lot of consumers, and they’re not satisfied because some have seen erosion in their real purchasing power,” she said.
Consumers are frustrated prices for goods are still trending upward, even if at a lower speed than before, Burke said.
WBJ Editor Brad Kane contributed to this story.
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