By JIM KINNEY | email@example.com
HADLEY – The Massachusetts economy grew by 4 percent in the second quarter of 2017 based on a surge of wage and salary gains statewide.
This is according to an estimate released Friday by MassBenchmarks, a survey of the Massachusetts economy prepared by the Federal Reserve Bank of Boston and the University of Massachusetts Donahue Institute.
This compares with the national estimate that U.S. real gross domestic product grew 2.6 percent during the same period, according to data released by the U.S. Bureau of Economic Analysis on Friday.
MassBenchmarks also said the state's economy will continue to grow at a moderately strong 2.7 percent annual rate over the final six months of 2017.
Editors wrote: "This pace of growth is sustainable provided skilled job seekers continue to be available to support the expansion of the Commonwealth's growing employers. Labor supply can be expected to increasingly become a constraint on state economic growth as the Massachusetts economy contends with the demographic constraints of an aging workforce."
In the second quarter of 2017, Massachusetts payroll employment expanded at a 0.9 percent annual rate after growing by 2.2 percent in the first quarter.
U.S. payroll employment grew at a 1.4 percent annual rate in the second quarter and at a 1.5 percent rate in the first quarter.
Above: Agri-Mark Inc. held a groundbreaking ceremony July 17, 2017, to mark a $17 million investment in its West Springfield facility, including expanding the building and adding a dozen jobs.
Don Treeger / The Republican
In Massachusetts, the unemployment rate rose from 3.1 percent in December to 3.6 percent in March and to 4.3 percent in June. This was due to an increase in the labor force, meaning more people were looking for work here.
MassBenchmarks said this is an indicator of a healthy economy.
The U.S. unemployment rate fell from 4.7 percent in December to 4.5 percent in March and 4.4 percent in June.
Above: Guns Inc. plans to relocate and expand with a shooting range at 1050 Main St., West Springfield.
Jim Kinney / The Republican
Wage and salary growth
Wage and salary income for Massachusetts, as estimated from state withholding taxes, rose 24 percent on an annual basis in the second quarter, after growing 3.7 percent in the first quarter.
U.S. wage and salary income is estimated to have grown 3.7 percent in the second quarter.
This doesn’t mean that people in Massachusetts got a 24 percent raise last month, said Michael Goodman, co-editor of MassBenchmarks and professor of public policy at the University of Massachusetts Dartmouth.
Instead, it indicates that the total amount paid in wages and salary across the commonwealth increased at a pace that — if it were to keep up for a whole year — would mean a 24 percent increase.
Goodman said 24 percent is consistent with employment growth. But he acknowledged that while the labor market in Western Massachusetts is improving, much of this rise in wages and salary is in Boston or its suburbs, where technology companies are growing.
Above: Michael D. Goodman.
Part timers and those not looking for work
The U-6 rate counts as unemployed those who are working part time but want full time work, as well as those who want to work but have not looked for work in the last four weeks. This measure is also improving, MassBenchmarks said, citing data from the federal Bureau of Labor Statistics.
In Massachusetts, the U-6 unemployment rate rose from 7.5 percent in December to 7.8 percent in June, while for the U.S. it fell from 9.2 percent in December to 8.6 percent in June. This reflects the rapid increase in persons rejoining the labor force or entering it for the first time.
Spending declined early in the year, then rebounded
Consumer and business spending on items subject to sales and motor vehicle sales taxes declined slightly in the second quarter in Massachusetts, by a 1.4 percent annual rate. This type of spending rose at a 9.3 percent rate in the first quarter.
Sales-tax-eligible spending was 2.9 percent higher in the second quarter of this year than in the second quarter of last year.
MassBenchmarks said this doesn't mean consumers are not spending. This measure of the economy tends to fluctuate.