Massachusetts Economy Entering A Recession (MassBenchmarks) - December 4, 2008

From MassBenchmarks: Massachusetts Economy Entering Recession, Third Quarter Growth Revised Downward, Tough Times Ahead

The Massachusetts economy grew at an annual rate of 0.2 percent between September and October and was up 1.2 percent from October of last year according to the MassBenchmarks Current Economic Index. The current index is normalized to 100 in July 1987 and is calibrated to grow at the same rate as Massachusetts real gross state product over the 1978–2003 period.

The MassBenchmarks Leading Economic Index for October was -1.5 percent, and the three-month average for August through October was -1.0 percent. The leading index is a forecast of the growth in the current index over the next six months, expressed at an annual rate. Thus, it indicates that the economy is expected to contract at an annualized rate of 1.5 percent over the next six months (through April).

“The state’s economy is falling headlong into a recession,” noted MassBenchmarks co-editor and UMass Boston professor, Alan Clayton-Matthews. “October’s real product growth of 0.2 percent is simply a transition from positive but slowing growth in the third quarter to outright declines forthcoming in the current quarter and first quarter of next year,” he added.

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