Mass. GDP grows at 37.7% annual rate in Q3

PROVIDENCE – Massachusetts’ gross domestic product increased at a 37.7% annualized rate in the third quarter, MassBenchmarks said on Thursday. 

The U.S. GDP increased at a 33.1% annualized rate at that time.

The journal is published by the University of Massachusetts Donahue Institute, in cooperation with the Federal Reserve Bank of Boston.

Massachusetts’ GDP  increase in the third quarter was attributed to widespread shutdowns of the economy in the spring and a subsequent phased reopening that took place in the summer months. The journal also noted that the “third quarter was aided in large part by federal fiscal and monetary policy, especially the CARES Act.”

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The Bay State’s economic decline in the second quarter was steeper than the national rate, due to more comprehensive shutdown measures than in other states and regions, the journal noted.

State payroll employment increased at a 29.5% annual rate in the quarter, following a 51.2% annual decline in the second quarter. Nationally, payroll employment declined at a 40% annual rate in the second quarter and rebounded at a 22.9% annual rate.

Massachusetts’ wage and salary income increased at a 13.6% annual rate in the third quarter, slower than a 20% rate nationally.

“Aggregate payroll incomes in the third quarter were down less than employment because job losses – although widespread – have been concentrated in lower-paying sectors, especially in leisure, hospitality and other services,” said Alan Clayton-Matthews, MassBenchmarks senior contributing editor and professor emeritus of economics and public policy at Northeastern University. He compiles and analyzes the Current and Leading Indexes. “These sectors include entertainment, hotels, restaurants, barbershops, gyms, and other personal services that require close personal contact or travel,” Clayton-Matthews added.

MassBenchmarks noted that fourth quarter economic growth is expected to slow sharply from the third quarter, reflecting the waning influence of fiscal support from the federal CARES Act.