Mass. trails country in economic growth
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The Massachusetts State House.
Economic growth in Massachusetts slowed in the first quarter and trailed growth across the United States for the second straight quarter, a trend that area economists are attributing to an aging state with constraints on the local workforce.
Massachusetts real gross domestic product grew at a 1.6 percent annualized rate in the first quarter of 2018 after growing at a 2.6 percent clip in the last quarter of 2017, according to the latest MassBenchmarks Current Economic Index, released by the journal of the Massachusetts economy published by the UMass Donahue Institute with the Federal Reserve Bank of Boston.
Nationally, real gross domestic product grew at a 2.3 percent annualized rate in the first quarter, and at a 2.9 percent rate in the fourth quarter
"The Massachusetts economy is now operating at virtually full capacity, but its growth is slowing due to demographic constraints on the labor force," the journal's authors wrote on Friday. "This demographic-induced slowdown has been on the horizon for years and it now appears to be directly restraining state growth in employment and economic activity."
Massachusetts has kept pace with or grown faster than the nation during the recovery that began in 2009, but the journal's authors concluded that "with an older workforce than the nation, Massachusetts appears to be entering a phase where it experiences slower growth than the U.S. for the foreseeable future."
The Bay State's jobless rate has held for months at a low rate of 3.5 percent and economists say a slower pace of job growth has more to do with a shortage of workers than a decrease in employer demand.
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