| After reporting in October that the Massachusetts economy contracted slightly in the third quarter of 2019, economists at MassBenchmarks on Thursday cited a U.S. government estimate suggesting that Massachusetts GDP actually grew by 2.2 percent between July and September 2019.
MassBenchmarks, which is published by the UMass Donahue Institute with the Federal Reserve Bank of Boston, also reported on Thursday that the Massachusetts economy expanded at a 1.3 percent annualized rate in the fourth quarter of 2019, compared to a 2.1 percent fourth quarter growth rate for the national economy in the fourth quarter.
U.S. gross domestic product grew by 2.1 percent in the third quarter, according to the U.S. Bureau of Economic Analysis.
While economic growth slowed in Massachusetts during the fourth quarter, MassBenchmarks economists said the major economic indicators for the state “signal solid economic performance,” with payroll employment rising 1.5 percent on an annual basis in the fourth quarter, an unemployment rate of 2.8 percent, and growth in both salary income and consumer spending.
Labor constraints, which MassBenchmarks flagged last year as the culprit behind a reported 0.2 percent third quarter contraction, remain a drag, preventing businesses from adding workers to payrolls. Alan Clayton-Matthews, senior editor at MassBenchmarks, also said a “steep drop in immigration” is limiting the capacity for economic growth in Massachusetts, with net international migration into Massachusetts falling from nearly 50,000 in 2017 to under 30,000 in 2019.
MassBenchmarks predicts that the state economy will grow at a 1.3 percent annualized rate over the first half of 2020.
