At 4.9 Percent, Mass. Economic Growth Outpaces U.S. In 2nd Quarter
After a rough winter, the U.S. economy — and Massachusetts' too — roared back in the second quarter 0f 2014.
The state economy grew at an estimated annual rate of 4.9 percent from April to June, topping the nation's 4 percent expansion over the same period, according to two reports out Wednesday. The U.S figure topped analysts' expectations of a 3 percent growth rate.
Both reports on second quarter economic growth — the MassBenchmarks index, by UMass and Boston Fed researchers, on the state figure, and the U.S. Department of Commerce estimate — represent strong bounceback from the first three months of the year.
After a rough winter, the U.S. economy -- and Massachusetts’ too -- roared back in the second quarter.
The U.S. economy contracted at an annual rate of 2.1 percent in the first quarter, according to a revised government calculation, while the Massachusetts economy shrank at a 0.3 percent rate over the same period, MassBenchmarks said Wednesday.
Revisions can significantly alter estimates of economic growth. In late April, for instance, the Commerce Department said the nation's economy contracted at just 0.1 percent, while MassBenchmarks found a 2.6 percent growth rate for Massachusetts.
"The steep downward revision in the estimate of Massachusetts economic growth for the first quarter (originally reported as positive 2.6 percent) is primarily due to the correspondingly large downward revision in U.S. economic growth in the first quarter, originally reported as positive 0.1 percent," Alan Clayton-Matthews, a senior MassBenchmarks editor and a Northeastern University associate professor, said in the index release.
Analysts have attributed much of the economy's first quarter struggles to the particularly harsh winter.
But payroll employment rose in the second quarter, both nationally and in Massachusetts. As the MassBenchmarks release stated: "Massachusetts payroll employment grew at a 1.7 percent annual rate in the second quarter, up from 1.2 percent in the first quarter." The state's unemployment rate is now 5.5 percent, down from 6.8 percent in January of this year.
Consumer spending in Massachusetts also increased from April to June. Spending on common items rose at an annual rate of 7.4 percent in the second quarter, MassBenchmarks found, up from a 6.1 percent rate in the first three months of the year.
The MassBenchmarks index also includes an estimate of future state economic performance. The forecast expects the Massachusetts economy to grow at an annualized rate of 3.8 percent over the next six months.