MassBenchmarks: Mass. GDP expands at 6.2% annual rate in Q2

BOSTON – Massachusetts’ gross domestic product expanded at an annualized rate of 6.2% in the second quarter, slower than the national rate of 6.5%, MassBenchmarks said on Thursday.

The state’s GDP was estimated to have grown at an annualized rate of 6.9% in the first quarter of the year. 

The state’s payroll employment increased at a 4.3% annualized rate in the quarter, slower than the national annualized rate of 4.7% and slower than the state’s 6.9% annualized growth rate in the first quarter. MassBenchmarks noted that the state has yet to return to pre-pandemic levels of employment, with state payrolls in June remaining 7.4% below a peak in February 2020.

Wages and salaries in Massachusetts increased at a 2.8% annual rate in the second quarter, level with growth measured in the first quarter of the year.

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The growth in GDP both in the state and nationally was attributed to strong consumer spending driven by the ​​American Rescue Plan. In Massachusetts, consumer spending was estimated to have increased by 23.1% over the first quarter.

MassBenchmarks projected that the economic growth in the state would continue to be strong through the remainder of 2021, projecting an annualized growth rate of 4.7% in the third quarter and 8.1% in the fourth quarter. However, it was noted that such projections do not account for the potential impact of the spread of the delta variant of the COVID-19 virus.

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

The full report may be found online.