Massachusetts economy grew at slower pace in 2011 than first thought as UMass revises data
The Massachusetts economy last year grew at a significantly slower pace than originally thought, expanding at roughly the same rate as the rest of the nation last year, the University of Massachusetts reported Wednesday.
Forecasters now believe the state’s economy grew at an annual rate of 1.8 percent in 2011, instead of the 2.9 percent first reported in UMass’s quarterly journal MassBenchmarks. The national economy, meanwhile, grew at a rate of 1.6 percent.
University of Massachusetts researchers lowered their estimate of the state’s economic growth after the US Department of Labor revised its initial estimates of state job growth in 2011. The revisions, based on additional data that became available over the year, showed Massachusetts created just over 9,000 jobs — far fewer than the nearly 41,000 first reported.
Before the revisions, Massachusetts was widely viewed by local economists as enjoying a much stronger recovery than the nation as a whole. The revised data, however, paints a dramatically different picture. The state’s production of goods and services expanded at only a slightly faster rate than the nation’s in 2011, while job growth in Massachusetts lagged far behind.
Employment last year grew 1.4 percent nationally, compared to less than a half-percent in Massachusetts, according to revised data.
Alan Clayton-Matthews, a Northeastern University economics professor who analyzed data for the UMass report, said that relatively slow growth in tax collections last year– which rise when more people are employed and earning salaries — signaled that job gains might be smaller than the initial employment data showed.
Local economists, however, are still unsure of the exact reasons for the state’s slow growth, Clayton-Matthews said. The state may have been affected by the drying up of federal stimulus funds, as well as the ongoing European debt crisis. Europe is a big overseas market for Massachusetts, accounting for about 40 percent of the state’s exports.
“We had a very strong growth in 2010, so it could just be a pause in growth,’’ Clayton-Matthews added.
The state’s unemployment rate, 6.9 percent in January, meanwhile, is well below the national rate of 8.3 percent.
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