The Massachusetts Economy: The Return of Growth Presentation to - - PowerPoint PPT Presentation

The Massachusetts Economy: The Return of Growth

Alan Clayton-Matthews School of Public Policy and Urban Affairs Northeastern University NEEP, MassBenchmarks

Presentation to MassEcon January 24, 2014

Pre-preliminary estimate of 4th quarter GDP (not adjusted for productivity)

• 0.7

4.8 2.8 7.3 1.5 2.4 3.6

• 0.3

3.5 1.9 4.7 5.7 5.1 4.8

• 1.3

3.2 1.4 4.9 3.7 1.2 2.8 0.1 1.1 2.5 4.1

• 2.0
• 1.0

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 2011 2012 2013 2014

Quarterly Growth at Annual Rates (%)

Growth in Real Product, Massachusetts vs. U.S.

Massachusetts U.S. Source: U.S., Bureau of Economic Analysis; Massachusetts: MassBenchmarks

Projected

Moderate job growth is gaining momentum

• 6.0
• 5.0
• 4.0
• 3.0
• 2.0
• 1.0

0.0 1.0 2.0 3.0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Growth From Same Month Prior Year (%)

Massachusetts and U.S. Payroll Employment Growth

MA US

Source: U.S. Bureau of Labor Statistics

Job growth in the first half of 2013 was smoother and a bit better than the CES-790 estimates.

3,250 3,270 3,290 3,310 3,330 3,350 3,370 Jan-12 Jul-12 Jan-13 Jul-13 Employment (thousands of jobs)

790 Payroll Employment Rebenchmark Preview Rebenchmarked exc. Definitional change Rebenchmarked inc. Definitional Change Current Official 790

Massachusetts earnings and spending are growing well.

Wage and salary income. 4th Quarter: 12.3%, Year: 5.9% Spending on taxable sales tax goods. 4th Quarter: 9.2%, Year: 6.9%

180,000 185,000 190,000 195,000 200,000 205,000 210,000 215,000 220,000 225,000

07 08 09 10 11 12 13 Millions of Dollars at Annual Rates

Wage and Salary Disbursements, Massachusetts (Derived from Withholding Taxes)

60.0 62.0 64.0 66.0 68.0 70.0 72.0 74.0 06Q1 07Q1 08Q1 09Q1 10Q1 11Q1 12Q1 13Q1

Billions of Current Dollars

Spending on Taxable Regular Sales Items and Motor Vehicles, Massachusetts

Source: Massachusetts Dept. of Revenue, Alan Clayton-Matthews

But unemployment is still a big problem.

2 4 6 8 10 12 14 16 18 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

Unemployment Rates by Age, Massachusetts

Less than 25 Years Old 25-54 Years Old 55 or Older

12-Month Moving Average. Source: Current Population Survey

Education explains very little of the variation in unemployment rates across states.

But is critical for job success for individuals.

U.S. MA MA Rank 1/ Overall 9.4% 8.7% 26 3.4% ND 11.9% NV By Educational Attainment No High School Degree 18.3% 20.1% 34 7.1% ND 29.2% DC High School Degree 11.8% 12.4% 34 4.6% SD 19.7% DC Some College 9.2% 8.5% 28 2.7% ND 15.9% DC Bachelor's Degree 5.0% 5.5% 41 1.2% ND 7.8% NV Graduate/Professional Degree 3.5% 3.7% 42 0.1% SD 4.8% CA By Age <25 19.3% 16.8% 22 5.1% ND 27.5% MS 25-54 8.1% 7.6% 27 3.2% ND 10.6% NV 55+ 6.6% 6.9% 37 2.3% WY 11.2% NV Selected Demographics <25, No High School Degree 32.3% 30.5% 24 7.2% ND 56.0% DC <25, High School Degree 22.1% 20.5% 26 7.0% WY 34.1% DC 25-54, High School Degree 10.7% 11.7% 37 4.7% NE 10.7% DC 1/ 1=Lowest Unemployment Rate; 51=Highest Unemployment Rate Lowest Highest

Table 1 Selected Unemployment Rate Statistics, 2012 Average Source: American Community Survey, 2012 PUMS

Employment opportunities for those with low levels of education vary enormously by state.

Expansion – finally, to solidify in 2014.

• 8.0
• 7.0
• 6.0
• 5.0
• 4.0
• 3.0
• 2.0
• 1.0

0.0 1.0 2.0 3.0 4.0 07 08 09 10 11 12 13 14 15 16 17 Quarterly Growth at Annual Rates

Employment Growth, Massachusetts

Source: NEEP, Moody's Analytics

Where the jobs will be.

98.0 100.0 102.0 104.0 106.0 108.0 110.0 112.0 114.0 13q1 14q1 15q1 16q1 17q1

2011q2=100

Payroll Employment Trends Over the Forecast, Massachusetts

Construction Professional and Business Services Leisure and Hospitality Information Education & Health Services Total Payroll Financial Activities Other Services Trade, Transportation, Utilities Manufacturing Government

Source: NEEP, Moody's Analytics