Massachusetts Economy Grew During The Summer
By Paul Tuthill
Amherst, MA – Two new reports show both the national and the Massachusetts economy grew in the third quarter, easing fears of a so-called double dip recession. But, job growth remains anemic and appears unlikely to improve in the next six months. WAMC"s Pioneer Valley Bureau Chief Paul Tuthill reports.
The US Bureau of Economic Analysis reported the national economy expanded at an estimated annual rate of 2 point 5 percent in the third quarter of this year. During the same period the Massachusetts economy grew at an annual rate of 3 point 9 percent, according to estimates released by MassBenchmarks, the economic journal published by the UMass Donahue Institute.
It is the fifth consecutive quarter in which the Massachusetts economy has outpaced the nation's as a whole. Robert Nakosteen a professor of economics at the University of Massachusetts Amherst Isenberg School of Management, says demand for Massachusetts produced technology products has been the growth driver.
But even as economic output grew over the summer few jobs were being created.
The MassBenchmarks report says income and spending growth slowed in the third quarter based on a review of state income tax withholding and sales tax receipts. It's estimated that wage and salary income declined at a two and half percent annual rate. Spending was up just three tenths of a percent.
The Massachusetts unemployment rate was 7 point 3 percent in September, down a tenth of a point from August. But the state's Executive Office of Labor and Workforce Development reported net job losses for both August and September.
Kevin Lynn, manager of business services at the Future Works Career Center in Springfield says hiring activity has been on a rollercoaster. The number of job openings posted was up 38 percent in August, but down 39 percent in September, compared with the same months a year ago.
And there are plenty of risks to the economy, including the debt crisis in Europe and the federal budget crisis in the U.S. according to Michael Goodman, the chair of the Public Policy Department at UMass Dartmouth.
The MassBenchmarks Leading Economic Index, which forecasts economic activity over the next six months is 2 point 9 percent. One of the economist who wrote the report, Robert Nakosteen, does not see a return to a booming economy anytime soon.