[ad_1]
Continued Sluggish Progress Probably In Mass. Over First Half Of 2024
FEB. 7, 2024…..The efficiency of the Massachusetts economic system over the past quarter of 2023 was “noticeably weaker” than the nationwide economic system, in line with a report launched Wednesday morning.
“This weak point was broad primarily based, and could be seen in employment, wage and wage revenue, and items spending, all of which have been weaker within the state than within the nation in This fall,” authors of MassBenchmarks Journal wrote.
Actual gross state product in Massachusetts elevated at an annual fee of 1.2 p.c within the fourth quarter of 2023, whereas U.S. GDP elevated at a 3.3 p.c annual fee throughout that stretch, in line with the U.S. Bureau of Financial Evaluation.
The weakening is being felt on Beacon Hill the place revenues that drove spending will increase are drying up. After one other down month in January, tax receipts seven months into fiscal 2024 are down 1 p.c in comparison with the identical interval of fiscal 2023.
Analysts tied slower financial development to some acquainted subjects: labor drive limits, heightened sensitivity to increased rates of interest, and housing provide constraints which might be exacerbating affordability challenges and certain inflicting some folks to go away the state.
Wage and wage revenue in Massachusetts within the fourth quarter declined at an annual fee of 9.6 p.c from the third quarter, whereas nationally wage and wage revenue grew at a 4.6 p.c annual fee.
“The decline in Massachusetts was possible resulting from a a lot weaker than traditional bonus season,” stated Alan Clayton-Matthews, senior contributing editor at MassBenchmarks, which is revealed by the College of Massachusetts Donahue Institute in cooperation with the Federal Reserve Financial institution of Boston.
Massachusetts is extra delicate to increased rates of interest in expertise and associated providers that depend on enterprise capital funding and enterprise spending, in line with the report, which included a warning about related impacts on tax collections.
A forecast ready in December by Clayton-Matthews, a Northeastern College economics professor emeritus, estimated that increased actual rates of interest would decrease fiscal 2024 state tax revenues by about $500 million within the final eight months of the fiscal yr, and by $1.3 billion in fiscal 2025.
“Greater rates of interest seem like taking their toll on the Massachusetts economic system, arguably to a better diploma than nationally, at the very least for now,” Wednesday’s report stated.
MassBenchmarks additionally cited “rising proof that the labor market is weakening in Massachusetts,” and reported that first-time unemployment insurance coverage funds in Massachusetts seem like rising and have been 15 p.c increased within the second half of 2023 than within the first, on a seasonally adjusted foundation.
MassBenchmarks analysts stated that continued sluggish development within the Massachusetts economic system was possible within the first half of 2024, tying that expectation to a perception that the Federal Reserve is predicted to start to chop rates of interest within the spring.
Entry the total MassBenchmarks Report under
[ad_2]
