Assumption Professor’s Research Indicates Worcester’s Economy Experiences Modest Growth
Research conducted over the past year by Assumption College Economics Professor Thomas White indicates that economic growth in Worcester is expected to pick up during the first half of 2014.
In the first of what will become regular, quarterly reports on the city economy’s performance, called Worcester Economic Indicators, White cites that for the next three to six months, Worcester’s economy is projected to grow at about 1.5 percent.
“Worcester residents and city officials are interested in how their local economy is performing,” said Professor White. “When the national economy is strong, the Worcester economy tends to be strong as well, but that is not always the case. As such, the Worcester Economic Index (WEI) is providing additional, important information on the city’s economic outlook.”
Professor White’s projections are based on a model that uses the WEI and four national leading indicators to forecast changes in trend growth. The WEI, which White developed, measures the performance of the Worcester-area economy and is based on local employment and unemployment data. Three factors were used to estimate the WEI: non-farm payroll employment, household employment, and the unemployment rate.
The four national indicators used were consumer expectations, changes in the S&P 500 Index, the interest rate spread (the difference between the yield on a 10-year treasury bond and the federal funds rate), and the Leading Credit Index (a composite of several financial sector variables that are meant to capture credit market conditions).
In addition, to complement the WEI’s forecast growth, four other indicators were considered to further gauge the direction of Worcester’s economy: initial unemployment claims for the Worcester region (an increase that signals a drop-off in economic activity); the amount of online help-wanted advertising in the Worcester area (an increase in help-wanted ads should be a precursor to increased hiring and employment); the number of new business incorporations in the local area (an increase may lead to new hiring by those firms); and the number of issued building permits (an increase would foreshadow increases in future employment).
“Economists measure how an economy is performing, and at the national level, measurements of Gross Domestic Product, unemployment, etc. are released on a regular basis and given a lot of attention, because they describe the state of the national economy,” said Professor White. “The Assumption College project analyzes Worcester’s local economy, measures its progress, and offers a forecast for the coming months.”
White will issue reports each quarter, with the next one being released in May. The current report may be found here.
Read media coverage of Professor White's Worcester Economic Index report:
- (Worcester) Telegram & Gazette, Feb. 24, 2014: "Data Trailblazer: Assumption Professor Creates New WEI to Keep Score"
- Worcester Business Journal, Feb. 18, 2014: "Report: Worcester Economy Expected to Grow 1.5% in Early '14"
- GoLocalWorcester.com, Feb. 17, 2014: "Assumption Econ. Professor Predicts Growth for Worcester in 2014"
Michael Guilfoyle, Executive Director of Media Relations, Assumption College