By PBN Staff
BOSTON – Massachusetts’ real gross state product increased at a 1 percent annualized rate during the fourth quarter, according to the Current Economic Index released Tuesday by MassBenchmarks.
The report, published by the University of Massachusetts Donahue Institute in collaboration with the Federal Reserve Bank of Boston, said the Massachusetts grew even as the U.S. economy waned.
During the first three quarters of the year, Massachusetts’ economy grew at revised annual rates of 2, 2.6 and 2.9 percent, respectively, when compared with the previous quarter. Analysts cautioned that data revisions may change the understanding of current economic conditions, according to the report.
The U.S. economy grew at annual rates of 2, 1.3 and 3.1 percent during the first three quarters, respectively. During the fourth quarter, however, the U.S. real gross domestic product decreased at an annual rate of 0.1 percent, according to the advance estimate released by the U.S. Bureau of Economic Analysis.
From December 2011 to December 2012, MassBenchmarks estimated that the Bay State’s real state product grew 2.1 percent as the U.S. economy grew 1.5 percent.
Year over year, the U.S. Bureau of Labor Statistics estimated that payroll employment in Massachusetts grew 1.6 percent, outpacing the nation as a whole, which saw 1.4 percent growth.
“Official employment revisions are expected in coming weeks and, based on the scale of the revisions experienced in recent years, could significantly alter our understanding of the Commonwealth’s economic performance in 2012,” said the report.
While warning of upcoming revision, the report still said that Massachusetts seemed to be “poised for faster growth in 2013.”
Massachusetts’ leading index, which is a forecast of the growth in the current index over the next six months, was 3.6 percent in December. For the next six months (through June), the economy is expected to grow at an annualized rate of 3.6 percent.
“Despite a faltering European economy, falling merchandise exports, weak national and international markets for information technology products, and policy uncertainty related to the so-called ‘fiscal cliff,’ the state’s economy managed to grow moderately in the final quarter of 2012,” said the report.
The report warned that the methodology for the leading index did not take into account the extension of the debt ceiling or national budget debates, except to the extent that expectations about spending cuts are used to construct the index.
“In this regard, recent employment gains, spending on motor vehicles and a surging stock market … account for the relatively optimistic outlook,” said the report.
To view the full MassBenchmarks report, visit: www.massbenchmarks.org.