BOSTON – Massachusetts’ gross domestic product was estimated to have grown at an annualized rate of 2% in the third quarter, level with the national growth rate, MassBenchmarks said on Thursday.
The slowdown in GDP growth in the state and country was attributed to the impact of the delta variant of COVID-19 restraining the pace of reopening, ongoing supply chain issues and labor shortages and a slowdown in consumer spending on durable goods.
Growth in the state was supported by spending in the leisure and hospitality and other services sectors.
Payroll employment in Massachusetts was said to have increased at a faster rate in the third quarter than the second quarter, rising from a 4.3% annual rate to a 6.9% annual rate.
Employment growth in Massachusetts was said to have outpaced the national average year over year, rising 6.2%, compared with a 4.6% growth nationally.
The unemployment rate in the state increased in the third quarter, rising from 4.9% in June to 5.2% in September. Nationally, the unemployment rate in the U.S. declined from 5.9% to 4.8% in that time.
“While the rise in the unemployment rate in Massachusetts may reflect persons returning to the workforce, participation rates are still well below pre-pandemic levels and the number of unemployed in the state, at 193,000 in September, is still well above its pre-pandemic levels of 105,000 in February of 2020,” said Alan Clayton-Matthews, MassBenchmarks’ senior contributing editor and professor emeritus of economics and public policy at Northeastern University.
Wage and salary income in the state increased at a 13.8% annual rate in the quarter, faster than the national growth rate of 9.5%.
Spending on goods in the state declined at a 5.8% annual rate in the quarter, after rising at an annualized rate of 40.3% in the second quarter. The decline mirrored a national trend. MassBenchmarks said that the decline in the state was largely driven by a decline in motor vehicle sales, attributable to supply shortages and low vehicle inventory.
MassBenchmarks also projected that GDP growth will accelerate in the fourth quarter of 2021, at an annualized rate of 4.5%.
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.
