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Economy grew faster in Mass. than in US for first quarter

While the US economy limped through the first quarter, posting the slowest pace of growth in two years, the state’s economy kicked into higher gear.

The Massachusetts economy grew by 2.3 percent in the first quarter of 2016, the University of Massachusetts reported Thursday, up from 1.4 percent in the previous quarter.

Unemployment in the state was at 4.4 percent in March, lower than it was before the recession, wages increased in the first three months of the year, and the state’s economy isn’t dependent on energy and oil, which has been dragging down the economy in other states, according to the report, published in the UMass economic journal, MassBenchmarks.


“We’re a little bit better positioned for what’s happening in the economy than some other parts of the country,” said Alan Clayton-Matthews, who prepared the estimates and is an economics professor at Northeastern University.

Nationally, the economy grew by 0.5 percent in the first quarter, down from 1.4 percent at the end of 2015. Consumers spent less, business investment declined, and the federal government’s spending, particularly on defense, slowed, according to the US Commerce Department.

Through much of the recent recovery, the first three months of the year have been a period of anemic growth, with the economy picking up steam as the year progressed. Last year, the downshift was blamed on the bad weather, particularly the Northeast’s record snowfall.

Economists expect the US economy to expand faster this year but still face challenges from the global slowdown and the weak energy sector.

The latest results offer some reasons for optimism. Nationally, disposable personal income increased by 3.2 percent in the first quarter, compared to 2.7 percent in the last three months of 2015. And investment in housing grew nearly 15 percent in the first quarter.

In Massachusetts, salaries and wages grew by 5.6 percent in the first quarter, after falling 7 percent in the final three months of 2015.


Clayton-Matthews noted that while Massachusetts’ economy is performing well, it may be masking some problems.

A broader measure of unemployment that includes part-time workers who want to be employed full time remained stubbornly high at 9.3 percent — far from prerecession levels of about 7.1 percent.

“It looks like our economy is a bit bifurcated,” Clayton-Matthews said. “It’s a concern for those who want full-time work, and there’s a a lot of them.”

Also, consumer spending shrunk by 6.3 percent in the first quarter after strong growth of 9.3 percent in the last quarter of 2015, much of it due to a slowdown in car buying, which was strong through most of last year.

Clayton-Matthews said he expects the Massachusetts economy to continue to pick up the pace in the second quarter.

Deirdre Fernandes can be reached at deirdre.fernandes@globe.com. Follow her on Twitter @fernandesglobe.