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July 31, 2019

Worcester area economic activity contracted in first half of year

Photo | TMS Aerial Solutions Worcester

The Worcester area economy shrunk slightly in the first half of the year, according to an Assumption College index released Wednesday relying on local employment figures.

The Worcester Economic Index, as compiled by Assumption College economics professor Thomas White, shows greater Worcester's economy contracting by a 0.9% annualized rate in the second quarter of the year. That follows a first quarter initially showing slow growth but has since been revised to show a 0.3% drop.

Those results are a contrast to state and national economic figures for the second quarters, which both showed slow but positive numbers.

The U.S. Bureau of Labor Statistics estimates for the second quarter show the Greater Worcester labor force shrinking by nearly 1,500 workers, or 0.4%, when adjusted for seasonal fluctuations. Those numbers are down more than 2,500 when not adjusted seasonally.

Such data shows weakness in the local labor market, White said.

The index has recorded positive growth rates in 15 of the last 18 quarters going back to 2015, but negative rates in three of the past five quarters.

White is still projecting positive growth in the months ahead for the Worcester metro area, which includes Worcester County and Windham County in Connecticut. A forecast calls for 1.3% to 1.5% growth in the next six months, based on consumer confidence, new business incorporations, interest rates and stock indexes, among other factors.

The Worcester metro area's unemployment rate was 3.4% in May, the latest month with data available form the Bureau of Labor Statistics. Across Massachusetts, the June rate was 3.0%, while the national rate was 3.7%.

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