Worcester Economy Delivers Another Solid Quarter
The greater Worcester economy grew at a 2.5 percent annualized rate during the second quarter of 2018, continuing the solid performance of the past 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 College Professor of Economics Thomas White, Ph.D., is an estimate of local economic activity based on recent Worcester-area employment and unemployment data.
“The local economy continued to add jobs during the second quarter,” said Prof. White. “Even after accounting for the usual upswing in employment at the start of the summer both the U.S. Bureau of Labor and Statistics payroll and household surveys showed net increases in the number of jobs. And the strong labor market continues to bring new entrants into the labor force.”
This quarter’s report includes a look at how job growth over the past year breaks down by industry sector. The professional and business services sector added the most jobs since June 2017, followed by construction and manufacturing.
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 June forecast, the WEI is expected to grow at a 1.9 percent annualized rate over the next six months.
“The leading indicators used in the forecast are not signaling much change moving forward. Credit market conditions, which seemed to have improved recently, and the momentum exhibited by the WEI itself are two components that are giving a bump to the forecast,” said Prof. White. “The continued tightening of monetary policy by the Federal Reserve has reduced the interest rate spread, the only component currently having a negative impact on the forecast.”
In addition, the report discusses two local leading indicators. Second quarter new business incorporations in the greater Worcester area increased almost 7 percent since the second quarter of 2017, a positive signal for potential future hiring. State-wide initial unemployment claims fell 8.7 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 November 2018. The full report is available here.
Kimberly Dunbar, Director of Public Affairs, Assumption College