MassBenchmarks: Mass. GDP jumped 7.3% in Q2

MASSACHUSETTS GDP increased at a 7.3 percent annualized rate in the second quarter of 2018. / COURTESY MASSBENCHMARKS
MASSACHUSETTS GDP increased at a 7.3 percent annualized rate in the second quarter of 2018. / COURTESY MASSBENCHMARKS

PROVIDENCE – Massachusetts gross domestic product increased at a 7.3 percent annualized rate in the second quarter, according to the University of Massachusetts publication MassBenchmarks Friday.

The national GDP increased at an annualized rate of 4.1 percent, according to the U.S. Bureau of Economic Analysis.

The report said that the recent economic growth in the Bay State was attributable to gains in employment, earnings, and consumer and business spending.

Payroll employment increased 2.9 percent in the quarter, compared with 1.7 percent growth across the United States. Employment grew at an annual rate of 0.9 percent in the Bay State in the first quarter of 2018, compared with 1.7 percent across the nation.

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Wage and salary income increased 19.2 percent on an annualized basis in the second quarter, while U.S. wage and salary growth was estimated to be 3.7 percent for the same period.

Spending in the state increased 6.7 percent during the quarter, driven by an increase in motor vehicle purchases, following a 3.4 percent increase in the first quarter.

“Low unemployment rates and strong demand for labor and housing may finally be lifting wage rates,” said Alan Clayton-Matthews, MassBenchmarks senior contributing editor and associate professor of economics and public policy at Northeastern University, in a statement. “They are also leading to increases in the cost of living, particularly for housing.”

The report also noted that unemployment in Massachusetts was 3.5 percent in June, near its historical low of 3.5 percent. It had been 3.8 percent in June 2017.

MassBenchmarks continues to see strong growth in the state for the rest of the year, estimating 5.3 percent growth in the third quarter and 5 percent in the fourth quarter.

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

Chris Bergenheim is the PBN web editor.

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