BOSTON – Massachusetts gross domestic product grew at a 1.6 percent annualized rate in the first quarter of 2018, according to MassBenchmarks, a journal on the Massachusetts economy published in collaboration between the UMass Donahue Institute and the Federal Reserve Bank of Boston.
The national GDP growth was 2.3 percent year over year, according to the Bureau of Economic Analysis Friday.
The MassBenchmarks report, released Friday, said that the Bay State economy is operating at “full capacity,” but will slow due to demographic constraints on its labor force. Part of this is due to the fact that Massachusetts has an older labor force than the United States average.
“Retiring baby boomers will continue to dampen labor force growth this year and throughout the next decade unless the Commonwealth is able to attract young workers from across the country and the world,” stated Alan Clayton-Matthews, MassBenchmarks senior contributing editor and associate professor of economics and public policy at Northeastern University, who compiles and analyzes the Current and Leading Indexes. “The continuous employment growth Massachusetts has been experiencing suggests that this may be happening already,” Clayton-Matthews added.
Quarter to quarter, payroll employment in the state expanded at 1 percent in the first quarter, compared with 1.7 percent nationally.
Year over year, the number of jobs in the state increased 1 percent, compared with a 1.5 percent gain in the nation.
More details from the report:
- The Massachusetts unemployment rate remained 3.5 percent in the first quarter.
- The U-6 unemployment measure in the state was 7.1 percent in March. This is the measure of those who are unemployed as well as those who work part time but want to be working full time and those who are too discouraged to be in the labor force, accounting for 100,000 residents in the Bay State, about one-third higher than pre-recession levels.
- Wage and salary income rose at a 2.1 percent annual pace in the quarter. MassBenchmarks also said that income and consumption remained at “healthy levels.”
- Spending in the state rose 4.9 percent in the quarter.
- Construction employment grew 7.7 percent year over year.
- Employment in the professional, scientific and technical services sector increased 4.2 percent year over year.
The report said that the journal expects the state economy to grow at a subdued pace in the second and third quarters of 2018. It noted that the state need to address its housing, transportation and infrastructure constraints to meet the needs of growing employers.
Chris Bergenheim is the PBN web editor.
