What’s UP with the Massachusetts Economy? MAPC Fall Council Meeting Crowne Plaza Hotel Natick, Massachusetts October 26, 2010 Barry Bluestone
The Economic Picture The U.S. Context
A Fragile U.S.Economic Recovery… Monthly payroll employment change, excl. Census Jobs Consistent monthly job growth of over 150K will be necessary to reduce unemployment
… As Federal Fiscal Stimulus Fades Source: Moody’s Analytics Stimulus Contribution to real GDP growth, % Tax rebate checks Recovery Act Cash for Clunkers Housing tax credit
Profits Surge and Jobs Should Follow… Sources: BLS, BEA Profit growth, lagged 3 quarters (R) Job growth, % change year-over year (L)
Sources: Treasury, Moody’s Analytics The average federal debt-to- GDP ratio since WWII is 40% Worries over Federal Debt Federal debt-to-GDP ratio
The Economic Picture Massachusetts Rebound
Massachusetts
The Massachusetts economy is growing faster than that of the U.S.
However, metro areas outside of Boston are still in recession,
The Greater Boston Housing Market
The Foreclosure Crisis
The Demographic Picture
New Hampshire+20.4% Vermont +17.0% Maine +13.2% Rhode Island +11.3% Massachusetts + 9.1% Connecticut + 8.0% U.S %
U.S.: 99% Mass: 135%
Net Increase in Households: 222,700 Under 55: -77, : +300,371
Impact on State and Local Government Will the aging of the population have a major adverse effect on state and local revenue? Will the aging of the population lead to an increased need for state and local public services Will the aging of the public employee workforce create a drain on state and local budgets?
The “Third Civil War” 19 th Century Civil War North-South: Slavery 20 th Century Civil War North-South: Where MFG takes place 21 st Century Civil War Which regions, states, and cities and towns will be able to retain and attract young working families to fill in the labor force and revenue gap? What factors are most important in winning the 3 rd Civil War?