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

The Massachusetts Economy: The Return of Growth Presentation to MassEcon January 24, 2014 Alan Clayton-Matthews School of Public Policy and Urban Affairs Northeastern University NEEP, MassBenchmarks

Pre-preliminary estimate of 4 th quarter GDP (not adjusted for productivity) Growth in Real Product, Massachusetts vs. U.S. Source: U.S., Bureau of Economic Analysis; Massachusetts: MassBenchmarks 8.0 7.3 7.0 Projected 6.0 5.7 Quarterly Growth at Annual Rates (%) 5.1 4.9 4.8 4.8 5.0 4.7 4.1 4.0 3.7 3.6 3.5 3.2 2.8 2.8 3.0 2.5 2.4 1.9 2.0 1.5 1.4 1.2 1.1 1.0 0.1 0.0 -0.3 -0.7 -1.0 -1.3 -2.0 2011 2012 2013 2014 Massachusetts U.S.

Moderate job growth is gaining momentum Massachusetts and U.S. Payroll Employment Growth Source: U.S. Bureau of Labor Statistics 3.0 2.0 Growth From Same Month Prior Year (%) 1.0 0.0 -1.0 -2.0 -3.0 -4.0 -5.0 -6.0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 MA US

Job growth in the first half of 2013 was smoother and a bit better than the CES-790 estimates. 790 Payroll Employment Rebenchmark Preview 3,370 Rebenchmarked exc. Definitional change 3,350 Rebenchmarked inc. Definitional Change Employment (thousands of jobs) Current Official 790 3,330 3,310 3,290 3,270 3,250 Jan-12 Jul-12 Jan-13 Jul-13

Massachusetts earnings and spending are growing well. Wage and salary income. Spending on taxable sales tax goods. 4 th Quarter: 12.3%, Year: 5.9% 4 th Quarter: 9.2%, Year: 6.9% Wage and Salary Disbursements, Massachusetts (Derived from Spending on Taxable Regular Sales Items and Motor Vehicles, Withholding Taxes) Massachusetts 225,000 74.0 Source: Massachusetts Dept. of Revenue, Alan Clayton-Matthews 220,000 72.0 215,000 Millions of Dollars at Annual Rates 70.0 210,000 Billions of Current Dollars 68.0 205,000 200,000 66.0 195,000 64.0 190,000 62.0 185,000 180,000 60.0 07 08 09 10 11 12 13 06Q1 07Q1 08Q1 09Q1 10Q1 11Q1 12Q1 13Q1

But unemployment is still a big problem. Unemployment Rates by Age, Massachusetts 12-Month Moving Average. 18 Source: Current Population Survey Less than 25 Years 16 Old 25-54 Years Old 14 55 or Older 12 10 8 6 4 2 0 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

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

But is critical for job success for individuals. Table 1 Selected Unemployment Rate Statistics, 2012 Average Source: American Community Survey, 2012 PUMS MA Rank U.S. MA 1/ Lowest Highest 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

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

Expansion – finally, to solidify in 2014. Employment Growth, Massachusetts Source: NEEP, Moody's Analytics 4.0 3.0 2.0 Quarterly Growth at Annual Rates 1.0 0.0 -1.0 -2.0 -3.0 -4.0 -5.0 -6.0 -7.0 -8.0 07 08 09 10 11 12 13 14 15 16 17

Where the jobs will be. Payroll Employment Trends Over the Forecast, Massachusetts Construction 114.0 Source: NEEP, Moody's Analytics Professional and Business 112.0 Services Leisure and Hospitality 110.0 Information 108.0 Education & Health Services 2011q2=100 106.0 Total Payroll Financial Activities 104.0 Other Services 102.0 Trade, Transportation, Utilities 100.0 Manufacturing 98.0 Government 13q1 14q1 15q1 16q1 17q1