Worcester Economy Turns in Strong Third Quarter
The greater Worcester economy grew at a 4.1 percent annualized rate during the third quarter of 2018, continuing the pattern of solid growth since the start of the year, according to the latest update of the Worcester Economic Index (WEI). The WEI, which is included in the Worcester Economic Indicators report released each quarter by Assumption University Professor of Economics Thomas White, Ph.D., is an estimate of local economic activity based on recent Worcester area employment and unemployment data.
“Local employment data shows that the region added jobs throughout the third quarter,” said Prof. White. “The September numbers are particularly interesting. Normally, employment estimates fall in September from seasonal factors, but preliminary estimates from the Bureau of Labor Statistics household survey show employment actually rising during the month. This is a sign of a healthy labor market.”
In addition to updating the Worcester Economic Index, each issue of Worcester Economic Indicators provides a six-month forecast for the WEI based on four national leading indicators, recent WEI estimates, as well as its long-run trend. According to the September forecast, the Worcester Economic Index is expected to grow at a 3.1 percent annualized rate over the next six months.
“The strong forecast is due more to the momentum from recent economic growth than to positive leading indicators,” said Prof. White. “Credit market conditions continue to give a boost to the forecast, but the recent slump in stock prices, along with continued tightening of monetary policy is preventing the forecast from being even more optimistic.”
In addition, the report discusses two local leading indicators. Third quarter new business incorporations in the greater Worcester area increased almost 10 percent since the third quarter of 2017, a positive signal for potential future hiring. State-wide initial unemployment claims fell 4.8 percent from a year ago, which is also a positive signal of the strength of the economy.
The next Worcester Economic Indicators report will be issued in February 2019. The full report is available here.