Economy: slow improvement if...
The Massachusetts economy, despite slowing in recent months, should improve in 2013, adding jobs at a moderate pace and gaining speed towards the end of the year, according to economic forecasts.
But the forecasts hinge on an important factor: the fiscal cliff. If drastic federal tax increases and spending cuts go into effect next month as scheduled, they could tip the state and national economies into a double-dip recession, according to Northeastern University economics professor Alan Clayton-Matthews. Massachusetts stands to lose more than 50,000 jobs in the next few years unless a political compromise is reached soon.
Clayton-Matthews said he expects Congress and the White House will reach a compromise before the worst can happen. And once they do, he said, it should provide a lift for Massachusetts, freeing employers from uncertainty about taxes and the government’s next move
“It looks like by the end of the year the economy will be accelerating robustly,” Clayton-Matthews said. “This weak period now, with all this uncertainty from the fiscal cliff and the slowdown in Europe, will improve throughout the year.”
Massachusetts recovered from the recession faster than the nation as a whole largely due to its high-tech industry and strong global demand for technology products. But the state economy slowed in recent months as national and global economies sputtered, weakening demand for Massachusetts products in key export markets such as Europe and China.
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