The state is at or near the bottom of the recession and is poised to grow in the third quarter, according to the quarterly MassBenchmarks report released today.
The MassBenchmarks Leading Economic Index for June was 0.9 percent while the three-month average for April through June was 0.8 percent. The leading index is a forecast of growth in the current index over the next six months, meaning state’s economy is expected to grow by 0.9 percent over the next six months, according to the report.
The state’s economy declined 1.6 percent in the second quarter, which was slightly worse than the nation’s decline of 1 percent during the same period. This is a reversal from the first quarter when the state’s economy declined by 4 percent and the nation’s economy declined by 6.4 percent.
“The Massachusetts labor market is still suffering, and job losses are expected to continue throughout the second half of the year, due to the growth in output being too small to overcome the effect of productivity growth (needing fewer workers to produce the same output because of increased output per worker)” said AlanClayton-Matthews, MassBenchmarks co-editor and UMass Boston professor.
“However, the pace of job loss should decline significantly, consistent with recent trends in monthly initial unemployment claims which have declined sharply,” he said.
MassBenchmarks is published by the University of Massachusetts Donahue Institute in cooperation with the Federal Reserve Bank of Boston. The Donahue Institute is an economic think tank.
