The Massachusetts Economy:Patiently Waiting for Worldwide       Growth to Return    Presented to MassEcon           Alan C...
A steady, slow to moderate national recovery, with             workers bearing the burden.                                ...
The state and the nation are growing at about the same                         pace.                                      ...
Massachusetts fared better this recession than the                                            nation…                     ...
…but it hasn’t always been that way.                                                   Massachusetts and U.S. Payroll Empl...
A preview of the coming payroll employment annual                    revisions.                                       Offi...
How the pain of the recession has been shared as told                 by unemployment.                                    ...
Unemployment Rates by Minority Status, Massachusetts14                                               12-Month Moving Avera...
Unemployment Rates by Age, Massachusetts18                                                  12-Month Moving Average.      ...
Unemployment Rates by Educational Attainment, Massachusetts25                                                        12-Mo...
Babyboomers are working more these days.                                       Employment Rates by Age, Massachusetts90%  ...
The European crisis has hurt Massachusetts.                          Massachusetts Merchandise Exports, Seasonally Adjuste...
Information technology markets have been weak.                                         Semiconductor Billings             ...
Worldwide Semiconductor Equipment Billings and Bookings                             Source: Semiconductor Equipment and Ma...
U.S. Investment in Information and Processing Equipment and                                                               ...
Housing finally appears to be on the mend in                       Massachusetts.                                         ...
Case Shiller Boston Home Price Index185.00180.00175.00170.00165.00160.00155.00150.00145.00140.00      Jan-05   Jan-06   Ja...
Construction will be the last housing indicator to                       improve.                       Massachusetts Sing...
Expect weak growth for the last quarter of this year and the firstquarter of next, followed by moderate acceleration throu...
Employment growth will be slow until 2014. Growth in 2016 is              restrained by demographics.                     ...
Housing is finally coming back.                                              Massachusetts Median Existing House Price, Se...
Employment loss impact of the fiscal cliff on Massachusetts         (Current law, with no action by Congress).•74,000. Moo...
The Massachusetts economy has been characterized byperiods of higher productivity growth. Will that continue?             ...
A longer-term view of average productivity growth.                 Productivity Growth, Centered 21-Year Moving Average3.0...
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Alan Clayton-Matthews 2013 Economic Forecast presented to Mass Econ 1/18/13

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Alan Clayton-Matthews Economic presentation to MassEcon. January 18, 2013

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Alan Clayton-Matthews 2013 Economic Forecast presented to Mass Econ 1/18/13

  1. 1. The Massachusetts Economy:Patiently Waiting for Worldwide Growth to Return Presented to MassEcon Alan Clayton-Matthews School of Public Policy and Urban Affairs Northeastern University NEEP, MassBenchmarks January 18, 2013
  2. 2. A steady, slow to moderate national recovery, with workers bearing the burden. Consumption, Income, and Wages (Nominal)14,000.0 7,500.0 Personal Consumption Expenditures Income Wages13,000.0 7,000.012,000.0 6,500.011,000.0 6,000.010,000.0 5,500.0 9,000.0 5,000.0 8,000.0 4,500.0 7,000.0 4,000.0 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  3. 3. The state and the nation are growing at about the same pace. Growth in Real Product, Massachusetts vs. U.S. Source: U.S., Bureau of Economic Analysis; Massachusetts: MassBenchmarks 6.0 5.4 5.0 4.3 4.1 Quarterly Growth at Annual Rates (%) 4.0 3.7 3.6 3.1 Projected 3.0 2.8 2.7 2.6 2.7 2.6 2.7 2.4 2.5 2.3 2.2 1.9 2.0 1.92.0 2.0 1.3 1.3 1.0 0.1 0.0 -1.0 -0.8 -2.0 2010 2011 2012 2013 Massachusetts U.S. Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  4. 4. Massachusetts fared better this recession than the nation… Massachusetts and U.S. Payroll Employment Growth Source: U.S. Bureau of Labor Statistics 3.0 2.0Growth 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 MA US Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  5. 5. …but it hasn’t always been that way. Massachusetts and U.S. Payroll Employment Growth Source: U.S. Bureau of Labor Statistics 8.0Growth From Same Month Prior Year (%) 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 -8.0 Jan-60 Jan-65 Jan-70 Jan-75 Jan-80 Jan-85 Jan-90 Jan-95 Jan-00 Jan-05 Jan-10 MA US Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  6. 6. A preview of the coming payroll employment annual revisions. Official and Re-Benchmarked CES-790 Payroll Employment 3,300.0 3,280.0 26.5 3,260.0 3,240.0Thousands of Jobs 3,220.0 3,200.0 3,180.0 3,160.0 3,140.0 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Unoffical Re-Benchmarked Official Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  7. 7. How the pain of the recession has been shared as told by unemployment. Unemployment Rates by Sex, Massachusetts 12 12-Month Moving Average. Source: Current Population Survey 10 All Men Women 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 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  8. 8. Unemployment Rates by Minority Status, Massachusetts14 12-Month Moving Average. Source: Current Population Survey1210 8 6 4 White Non-Hispanic Non-White or Hispanic 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 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  9. 9. Unemployment Rates by Age, Massachusetts18 12-Month Moving Average. Source: Current Population Survey16 Less than 25 Years Old14 25-54 Years Old 55 or Older1210 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 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  10. 10. Unemployment Rates by Educational Attainment, Massachusetts25 12-Month Moving Average. Source: Current Population Survey Less Than High School High School or GED20 Some College, Less Than a Bachelors Degree Bachelors Degree or Higher1510 5 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 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  11. 11. Babyboomers are working more these days. Employment Rates by Age, Massachusetts90% 12-Month Moving Average. Source: Current Population Survey80% Less than 25 Years Old70% 25-54 Years Old 55 or Older60%50%40%30% 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 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  12. 12. The European crisis has hurt Massachusetts. Massachusetts Merchandise Exports, Seasonally Adjusted 3-Month Moving Average Source: U.S. DOC, WISER, seasonally adjusted by author. 240 220 200 USIndex, 1998=100 180 MA 160 140 120 100 80 Jan-98 Jan-99 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 Month Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  13. 13. Information technology markets have been weak. Semiconductor Billings Source: Semiconductor Industry Association, seasonally adjusted 150.0 140.0 130.0 120.02007=100 110.0 100.0 90.0 80.0 70.0 60.0 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 World Europe Japan Americas Asia Pacific Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  14. 14. Worldwide Semiconductor Equipment Billings and Bookings Source: Semiconductor Equipment and Materials International 3,500.0 3,000.0$ Millions, 3-mo mov. Avg. 2,500.0 2,000.0 1,500.0 1,000.0 500.0 0.0 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 Billings Bookings Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  15. 15. U.S. Investment in Information and Processing Equipment and Software Source: U.S. Bureau of Economic Analysis, NIPA AccountsNominal growth from prior quarter at annual rate (%) 25.0 20.0 18.1 16.4 15.0 15.0 12.0 10.2 9.5 10.0 7.9 8.4 6.6 6.8 5.3 5.3 5.4 5.8 5.9 5.2 5.8 4.2 3.9 3.6 5.0 2.5 2.2 1.6 1.5 2.1 1.7 1.2 0.5 0.5 0.0 -0.1 -0.6 -1.9 -1.1 -1.2 -5.0 -3.1-3.8 -10.0 -8.2 -8.3 -15.0 -20.0 -21.9 -25.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  16. 16. Housing finally appears to be on the mend in Massachusetts. Single Family Home Sales Source: Mass. Assoc. of Realtors, Seasonally Adjusted by NU5,0004,5004,0003,5003,0002,5002,000 Jan-99 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 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  17. 17. Case Shiller Boston Home Price Index185.00180.00175.00170.00165.00160.00155.00150.00145.00140.00 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  18. 18. Construction will be the last housing indicator to improve. Massachusetts Single Family Housing Permits Number per Month, Seasonally Adjusted1,6001,4001,2001,000 800 600 400 200 Source: Census Bureau, Seasonally Adjusted by Author 0 Jan-99 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 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  19. 19. Expect weak growth for the last quarter of this year and the firstquarter of next, followed by moderate acceleration through 2015. Average Annual Growth Forecast 11 12 13 14 15-16 Period Payroll Employment 0.3 1.2 0.8 1.9 1.8 1.4 Wage and Salary Disbursements (WSD) 2.7 5.2 5.6 5.8 5.3 5.3 Personal Income 3.8 5.0 4.6 6.4 5.4 5.2 WSD per Payroll Worker 2.4 4.0 4.7 3.8 3.5 3.8 Population 0.5 0.5 0.5 0.5 0.4 0.5 Income Deflator (PCE U.S.) 2.5 1.9 2.1 2.0 1.6 1.9 Real Gross State Product 1.8 2.4 2.9 4.0 3.5 3.3 Personal Income 1.2 3.0 2.4 4.3 3.7 3.2 Per Capita Personal Income 0.6 2.4 1.8 3.8 3.3 2.8 WSD per Payroll Worker -0.2 2.0 2.5 1.7 1.8 1.8 Growth in each period is the annualized growth rate over the following quarters: 11: 2010Q4 to 2011Q4 12: 2011Q4 to 2012Q4 13: 2012Q4 to 2013Q4 14: 2013Q4 to 2014Q4 15-16: 2014Q4 to 2016Q4 Forecast Period: 2012Q2 to 2016Q4 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  20. 20. Employment growth will be slow until 2014. Growth in 2016 is restrained by demographics. Employment Growth, Massachusetts Source: NEEP, Moodys Analytics 4.0 2.0 Quarterly Growth at Annual Rates 0.0 -2.0 -4.0 -6.0 -8.0 07 08 09 10 11 12 13 14 15 16 Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  21. 21. Housing is finally coming back. Massachusetts Median Existing House Price, Seasonally Adjusted Sources: National Association of Realtors, Moodys Analytics, NEEP 20 360 10Percent change at annual rates 340 Thousands of dollars 0 320 -10 300 -20 -30 280 -40 260 03q1 04q1 05q1 06q1 07q1 08q1 09q1 10q1 11q1 12q1 13q1 14q1 15q1 16q1 Appreciation Rate (L) Price (R) Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  22. 22. Employment loss impact of the fiscal cliff on Massachusetts (Current law, with no action by Congress).•74,000. Moody’s Analytics. Reflects tax and spending impact of current law versus “middle ground” scenario of this forecast.•60,497. Stephen Fuller, George Mason University. Spending cuts only.•52,000. MassBenchmarks. Spending cuts only. Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  23. 23. The Massachusetts economy has been characterized byperiods of higher productivity growth. Will that continue? Productivity Growth, Centered 5-Year Moving Average 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 55 60 65 70 75 80 85 90 95 00 05 10 15 -0.5% MA US Alan Clayton-Matthews presentation to MassEcon on 1/18/2013
  24. 24. A longer-term view of average productivity growth. Productivity Growth, Centered 21-Year Moving Average3.0%2.5%2.0%1.5%1.0%0.5%0.0% 55 60 65 70 75 80 85 90 95 00 05 10 15 MA US Alan Clayton-Matthews presentation to MassEcon on 1/18/2013

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