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The state's economy grew at a modest pace last year, but it was tempered by the cooling housing market. That's the lukewarm assessment of an economic summit being held at the federal reserve in Boston Thursday.
The New England Economic Partnership meets twice a year to forecast the region's economy. WBUR's business and technology reporter Curt Nickisch has more.TEXT OF STORY
CURT NICKISCH: Economists are supposed be neither optimists nor pessimists. They're supposed to be objective.
CLAYTON-MATTHEWS: Is the economy a cup that's half full or half empty? I guess that depends on your perspective.
NICKISCH: Alan Clayton-Matthews will let you see it either way. He's an economist and professor of public policy at UMass-Boston. Later this morning, he's giving his forecast for the Massachusetts economy at NEEP. So let's start with his half-empty view.
CLAYTON-MATTHEWS: Well it looks like the housing correction is going to continue throughout this year, into the beginning of 2008.
NICKISCH: The worsening housing market is hampering economic growth, says Clayton-Matthews. Homeowners feel less well off and are spending more conservatively. Construction companies are cutting jobs. All this is being magnified by the fallout from the sub-prime mortgage market.
Still, to use another water metaphor, Clayton-Matthews says the housing market is not an anchor keeping the state economy from making headway. He's expects Massachusetts to add jobs at less than one percent a year over the next four years That's where he sees the glass half-full.
CLAYTON-MATTHEWS: I think the longer you look out, the brighter the picture is for the state's economy.
NICKISCH: But it's clear this slowly rising tide is not lifting all boats, to use yet another water metaphor. At least according to Mike Goodman, the president of NEEP. He says job losses in manufacturing are being offset by gains in other fields.
GOODMAN: The gains that we've seen in the labor market in particular have been in professional and business services, education and health services and other largely white collar fields. So there do seem to be clear winners and losers that have been created and that's a pattern that's expected to continue going forward.
NICKISCH: That changing labor market is going to create new challenges for the state. Or opportunities. Depending on how you see it. You know, half-empty or half-full.
For WBUR, I'm Curt Nickisch.
This program aired on May 24, 2007. The audio for this program is not available.
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