PROVIDENCE – Massachusetts gross domestic product was estimated to have risen at an 11.3% annual rate in the first quarter, significantly faster than the U.S. growth of 6.4% in that time, according to a report from MassBenchmarks Thursday.
“Economic growth in both the state and the nation in the first quarter exceeded expectations for two reasons,” stated Alan Clayton-Matthews, MassBenchmarks senior contributing editor and professor emeritus of economics and public policy at Northeastern University. “The first is due to the sheer size of the recent federal coronavirus relief package, which had an immediate effect on household income and consumer expectations, and the second was the faster-than-expected distribution of COVID-19 vaccines.”
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Payroll employment in the state increased at a 6.8% rate in the first quarter, faster than the national annual rate of 2.1%.
Massachusetts’ aggregate salary and wage growth increased at a 25.7% annual rate in the quarter, compared with a 6.6% annual growth rate in the U.S. in that time. The report noted that low-wage sectors, such as the leisure and hospitality and professional services sectors, continued to be the hardest-hit and furthest from pre-pandemic employment levels in Massachusetts.
The state’s unemployment rate in March was 6.8%, higher than that of the U.S. 6% rate at that time.
The U-6 unemployment rate in March, which includes individuals that work part time but who want full-time work, as well as persons who want work but have not looked for work in the last four weeks, was 9.4% in the state and 10.7% in the U.S., both well above pre-pandemic levels.
MassBenchmarks said that the state’s economic growth was expected to remain strong through the spring and summer months, and was projected to increase at a 7.5% annual rate in the second quarter, and an 8.5% annual rate in the third quarter.
The report also said that threats to future growth could include “unexpected delays or disruptions to the pace at which the population becomes vaccinated, the unforeseen emergence of vaccine-resistant viral variants, and supply bottlenecks due to supply chain disruptions or labor shortages domestically and internationally.”
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.
