Economic Growth Exceeded Expectations in Q2-2024
On a day when the global financial markets took a sharp turn downward on signs of a U.S. economy slowdown, the economists at MassBenchmarks reported the “pleasant surprise” that state economic growth exceeded expectations in the second quarter.
Massachusetts real gross state product increased at an annual rate of 3.3 percent during the second quarter of 2024, according to MassBenchmarks, while U.S. GDP increased at an annual rate of 2.8 percent, per the U.S. Bureau of Economic Analysis. Both represent improvement over the first quarter — Massachusetts GDP grew at an annual rate of 1 percent while U.S. GDP grew at a 1.4 percent rate during the first three months of the year.
“The higher-than expected boost in second quarter growth came as a pleasant surprise following the more modest growth experienced during the first quarter. In Massachusetts, this increase in growth was supported by moderate payroll employment growth, high withholding and sales tax receipts — which imply high wage and salary income and spending growth, low unemployment rates, and a growing labor force,” the latest notes from the MassBenchmarks board, published by the University of Massachusetts Amherst Donahue Institute in cooperation with the Federal Reserve Bank of Boston, said. “Labor market indicators, while giving mixed signals, were mostly positive in the second quarter. Payroll employment growth slowed but remained positive, expanding at a 0.6 percent annual rate in Massachusetts in the second quarter as compared to 1.5 percent for the U.S.”
Compared to the second quarter of 2023, employment was up 0.7 percent in Massachusetts and 1.7 percent in the U.S. during the second quarter. But MassBenchmarks cautioned that the moderate employment growth estimate “may, however, be overstating job growth in Massachusetts.”
