State Economy May Reach Bottom This Year
The state's unemployment rate will exceed 9 percent within the next few months and the sinking economy could reach its bottom before the year is out, according to the latest MassBenchmarks Bulletin.
The Massachusetts economy contracted at an annualized rate of 4.2 percent in February, according to the Benchmarks Current Economic Index. The Benchmarks Leading Index, which forecasts growth expected over the next six months, was -3.8 percent in February, indicating that the state economy is expected to shrink at an annualized rate of 3.8 percent through August.
Alan Clayton-Matthews, Benchmarks co-editor and UMass Boston economics professor, noted that the state unemployment rate hit 7.8 percent in February. At its current pace, the unemployment rate will soon surpass the 9.1 percent registered during the recession of the late 1980s and early 1990s.
Clayton-Matthews said glimmers of hope can be seen in the education and health services sectors, which continue to grow. Also, the Benchmarks leading index is beginning to show signs that the pace of economic decline in Massachusetts is slowing. If that is indeed the case, Clayton-Matthews said the state's economy could reach its lowest point of the current recession by the end of the year.
MassBenchmarks is published by the University of Massachusetts Donohue Institute.
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