|
Mass Economy Continues its Expansion in Q1 2014, |
| Growth is fueled by increases in spending, incomes, and international exports |
|
 |
|
Massachusetts real gross domestic product grew at an estimated annual rate of 2.6 percent in the first quarter of 2014 according to the MassBenchmarks Current Economic Index, released today by MassBenchmarks, the journal of the Massachusetts economy published by the UMass Donahue Institute in collaboration with the Federal Reserve Bank of Boston. In contrast, according to the U.S. Department of Commerce, national real gross domestic product grew at an annual rate of 0.1 percent, according to the preliminary estimate of the U.S. Bureau of Economic Analysis. In the fourth quarter of last year Massachusetts real GDP grew at a revised 4.4 percent annual rate as compared to a 2.6 percent rate for the U.S.
"The relatively strong growth for Massachusetts in the first quarter reflects a moderate increase in employment, a sharp fall in the unemployment rate, very strong wage and salary income growth, and increased spending by households and businesses," noted Alan Clayton-Matthews, MassBenchmarks Senior Contributing Editor and Associate Professor of Economics and Public Policy at Northeastern University, who compiles and analyzes the Current and Leading Indexes.
During the first quarter of 2014, payroll employment expanded at a 1.2 percent annual rate, wage and salary income — based on state withholding tax collections — increased at a 15.0 percent annual rate, and spending on goods subject to the state regular sales tax and the motor vehicle sales tax grew at a 6.1 percent annual rate. "Wage and salary income growth in the last two quarters have likely been boosted by better-than-average bonuses for workers as a result of the sharp rise in stock markets last year," noted Clayton-Matthews.
The Massachusetts economy also appears to be benefitting from improving conditions in national and world economies. On an annual average basis, Massachusetts merchandise exports in 2013 were 4.6 percent higher than in 2012, after having fallen 7.7 percent between 2011 and 2012. Nationally, merchandise exports in 2013 were 2.1 percent higher than in 2012. While there are some downside risks to the state's economic outlook associated with slowing growth in China and the uncertainty associated with the crisis in Ukraine, for the time being at least, national and state growth is being supported by the momentum of strengthening domestic demand.
The MassBenchmarks Leading Economic Index for March was 4.1 percent, and the three-month average for January through March was 4.4 percent. The leading index is a forecast of the growth in the current index over the next six months, expressed at an annual rate. Thus, it indicates that the state economy is expected to grow at an annualized rate of 4.1 percent over the next six months (through September 2014).
MassBenchmarks is published by the University of Massachusetts Donahue Institute in cooperation with the Federal Reserve Bank of Boston. The Donahue Institute is the public service, outreach, and economic development unit of the University of Massachusetts Office of the President. The Current and Leading Indexes are compiled and analyzed by Dr. Clayton-Matthews, Associate Professor of Economics and Public Policy at Northeastern University and released quarterly by MassBenchmarks.
For a full breakdown of the latest indexes, click here. A comprehensive analysis of the state of the Massachusetts economy can be found in the most recent issue of MassBenchmarks.
For more information please contact:
Dr. Alan Clayton-Matthews |
 |
Dr. Robert Nakosteen |
|
||
|
Dr. Michael Goodman
|
|
Daniel Hodge |