WEI: Worcester Economy Reports Strongest Single Quarter in Two Years
The greater Worcester economy grew at roughly 2.3 percent during the first quarter of 2018, the strongest single quarter since 2016, 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.
“Employment growth continued during the first three months of the year in the greater Worcester area,” shared Prof. White. “While there was an uptick in the unemployment rate during the first quarter, that was largely due to seasonal effects, once those are accounted for the unemployment rate was nearly unchanged. In addition, there was a sizeable increase in the labor force which suggests that a relatively tight labor market is drawing workers back into the 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 Quarter 1 forecast, the Worcester Economic Index is expected to grow at a 1.8 percent annualized rate over the next six months.
“The local economy seems to have some momentum and we should expect above trend growth in the coming months,” said Prof. White. “However, a couple leading indicators are currently negative and therefore dampen the forecast slightly. Recent declines in the stock market and the continued gradual tightening of monetary policy by the Federal Reserve may constrain future economic performance.”
In addition, the report discusses two local leading indicators. First-quarter new business incorporations in the greater Worcester area increased about 13 percent since 2017, which is a positive signal for potential future hiring. State-wide initial unemployment claims fell 7 percent from a year ago, which is also a positive signal.
The next Worcester Economic Indicators report will be issued in August 2018. Additional information about this project is available here.
Kimberly Dunbar, Director of Public Affairs, Assumption College