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Economists Observe State Economy’s Accelerated Growth in First Half of 2023, Predicting a Smooth Landing


Sep 7, 2023

Massachusetts’ economic growth has surpassed expectations in the first half of 2023, easing concerns of a recession. A report released by MassBenchmarks, which analyzed the statewide economy in collaboration with the Federal Reserve Bank of Boston and the University of Massachusetts Donahue Institute, revealed that the state’s real gross domestic product (GDP) grew faster than the national average in both the fourth quarter of 2022 and the first two quarters of 2023. In the second quarter of 2023, GDP growth peaked at 4%, with projections suggesting a moderation to 0.7% in the third quarter and 2% in the fourth quarter. However, the report also warned of potential challenges on the horizon.

Despite these positive results, there are concerns regarding various factors that could impact the state’s economic growth. For instance, ongoing tensions caused by Russia’s invasion of Ukraine and China’s economic slowdown are worrisome. Additionally, the potential consequences of a federal shutdown if federal spending bills fail to pass could have significant ramifications. The report also highlighted the changing nature of the workforce, as fewer workers are returning to the office after the pandemic. This shift may lead to a decline in the value of office complexes, affecting mortgage lenders in the future.

One crucial issue Massachusetts needs to address is the state’s shrinking pool of available workers. The report indicated that a slight increase in the labor force at the beginning of the year was short-lived, with a decline of 30,000 workers between June 2022 and June 2023, after adjusting for seasonal changes. The state has experienced a downward trend in the labor force even before the pandemic, with a net decline of 125,000 workers since June 2019. To combat this deficiency, the report suggested comprehensive policy interventions in areas such as housing, transportation, and training and education. Additionally, simplifying the process for obtaining professional licenses would help individuals quickly enter the workforce.

By Editor

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