Worcester’s Economic Growth Slows in Fourth Quarter
The greater Worcester economy grew at roughly 1.0 percent during the fourth quarter of 2017, down slightly from the revised 1.3-percent figure realized in during the third quarter, 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.
“While the area continued to add jobs in the fourth quarter, this year’s numbers showed less of a seasonal bump than usual, which contributed to the slow growth of the WEI at the end of the year,” said Prof. White. “The December unemployment rate for Worcester was 3.3-percent which is still below both the state and national estimates.”
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 December forecast, the Worcester Economic Index is expected to grow at a 1.7-percent annualized rate during the first half of 2018.
“Most of the leading indicators used in the forecast are positive. Consumer expectations are strong, the stock market has been on the rise, and credit market conditions are favorable,” said Prof. White. “Only the interest rate spread is having a negative impact, which is due to recent rate hikes by the Federal Reserve.”
In addition, the report highlights two local leading indicators. Fourth quarter new business incorporations in the greater Worcester area were up over 10.0-percent since 2016 which is a positive signal for potential future hiring. Statewide initial unemployment claims fell 0.2-percent over the past year, which is not significant enough to be either a positive or a negative sign.
The next Worcester Economic Indicators report will be issued in May 2018. Additional information about this project is available here.
Kimberly Dunbar, Director of Public Affairs, Assumption College