Mass. Economic Growth Outpaces U.S.
Economic growth in Massachusetts rebounded in the third quarter, regaining its momentum from the first three months of the year and outpacing national economic growth, according to preliminary data from MassBenchmarks, the Bay State’s economic journal published by the UMass Donahue Institute and the Federal Reserve Bank of Boston.
And that level of growth is expected to continue through the first quarter of 2014.
The state’s gross domestic product increased at a 3.5 percent annual rate during the third quarter, MassBenchmarks said, more than double the growth in the second quarter. MassBenchmarks said the U.S. economy grew at a 2.8-percent annual clip in the third quarter.
However, one of the MassBenchmark editors, Northeaster University professor Alan Clayton-Matthews, cautioned that the data is incomplete because of a delay in the state’s employment report for September, caused by the partial shutdown of the federal government for most of October. The Massachusetts Executive Office of Labor and Workforce Development works off data from the federal government, which was impacted by the shutdown. As a result, the Bay State’s employment report for September will not be released for another two weeks.
Nonetheless, MassBenchmarks estimated that the state added about 1,000 jobs in September, estimating that number based on the national jobs report for that month after it was released in late October - more than two weeks after it was to have been released - and the historical average relationship between national and Massachusetts state employment, Clayton-Matthews said.
Based on state withholding and sales taxes, nominal wage and salary income increased at a 2.9 percent annualized rate in the third quarter, and nominal spending on items subject to regular sales taxes and automobiles increased at a brisk 6.5 percent annualized rate, MassBenchmarks said. In contrast, wage and salary income in the second quarter declined 6.9 percent, and spending increased by a more modest 2 percent.
The MassBenchmarks Leading Economic Index for September was 3.4 percent, and the three-month average for July through September was 3.6 percent. The leading index is a forecast of the growth in the current index over the next six months, expressed in an annual rate.
According to that gauge, economic growth is estimated to continue to improve over the next six months, growing at an annualized rate of 3.4 percent from October through March. But the indicators on which the Leading Index is based don’t incorporate the effects of the federal government shutdown and its aftereffects - including continued sequestration spending reductions - since most of the information on which the index is based was collected through September, before the shutdown began.
As a result, fourth-quarter growth will likely be lower than the 3.4 percent the index projected, MassBenchmarks said.
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