Massachusetts growth slowed in 3Q

BOSTON – Massachusetts’ growth slowed in the third quarter after “robust growth” in the second quarter, MassBenchmarks, the journal of the Massachusetts economy, reported on Thursday.
Published by the UMass Donahue Institute in collaboration with the Federal Reserve Bank of Boston, MassBenchmarks said that Massachusetts’ real gross domestic product grew at a rate of 3.2 percent in the third quarter. In comparison, the U.S. real domestic product grew at a rate of 3.5 percent during the same period.
Looking ahead, the economy is expected to grow at an annual rate of 2.9 percent over the next six months.
“After a weak weather-affected first quarter and the rebound in the second quarter, both the Massachusetts and U.S. economies seem to have returned to moderate growth, with some inconsistent signs of acceleration in growth,” Alan Clayton-Matthews, MassBenchmarks senior contributing editor and associate professor of economics and public policy at Northeastern University, said in a statement.
The job market also continue to improve, despite a temporary decline in retail employment in August due to the Market Basket disruption, the report stated.
Payroll employment in Massachusetts grew at a 2 percent rate in the third quarter, compared with growth of 1.8 in the third quarter of last year. U.S. payroll employment also grew 2 percent in the third quarter.
“For both the state and the nation, this reflects a slight acceleration in the pace of job growth,” the report stated.
Labor earnings and spending have kept pace with job growth in Massachusetts, the report stated.
Wage and salary income grew at an annual rate of 9.2 percent in the third quarter and was up 6.1 percent on a year-over-year basis. Spending on items subject to the regular sales tax and motor vehicle sales tax grew at an annual rate of 1 percent in the third quarter, and was up 5.7 percent from the third quarter of last year.
The unemployment rate rose from 5.5 percent in June to 6 percent in September, just above the U.S. rate of 5.9 percent.
“However, this modest rise in the unemployment rate does not signal a weakening labor market. Rather, it appears that workers are gaining confidence in the economy and are entering or reentering the labor force in greater numbers. In the third quarter, the state’s labor force was 16,900 higher than in the second quarter, an annualized rate of increase of 1.9 percent,” the report stated.

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