As Beacon Hill awaits next week’s release of data on critical April tax collections, economists reported Friday that the state economy grew at a 4.6 percent annual rate in the first quarter, an increase from the 2.3 percent growth rate in the fourth quarter of 2018.
Analysts at MassBenchmarks on Friday cited “surprisingly strong growth in employment and earnings,” with 24,100 jobs added in the first quarter compared to 20,000 added during all of 2018, according to U.S. Bureau of Labor Statistics data. State wage and salary income grew at an unprecedented 17.4 percent annual rate in the first quarter in Massachusetts.
“One thing is clear, the economy, especially in Massachusetts, is operating at or near full employment,” Northeastern University professor Alan Clayton-Matthews, the senior contributing editor of MassBenchmarks, said in a statement. “The state’s unemployment rate stood at 3.0 percent in March and is near the all-time low of 2.6 percent recorded at the height of the ‘Dot-Com’ bubble in 2000.”
U.S. real gross domestic product grew at a 3.2 percent annual rate in the first quarter, after growing at a 2.2 percent rate in the fourth quarter of 2018.
The MassBenchmarks Leading Index projects a state economy growth rate of 3.2 percent in the second quarter and 2.6 percent in the third quarter of 2019. Analysts flagged spending as “the only sign of weakness in the first quarter,” with outlays on items subject to the regular sales and motor vehicle sales taxes declining at a 3.9 percent annual rate in the first quarter, after growing at a 5.9 percent annual rate in the fourth quarter.