MA Economic Recovery Slowing
With the threat of sequestration looming, one research institute is predicting that Massachusetts' economic recovery will start to slow. Up until a few months ago, the state's economy was recovering from the recession faster than the national economy. But recently, the recovery has stalled. That's according to Mass Benchmarks, a publication of the UMass Donahue Institute. Since the slowdown, Massachusetts' unemployment rate has hovered in the 6.5 percent range, while the national rate is 7.8. UMass Economics professor and executive editor of Mass Benchmarks, Robert Nakosteen expects the unemployment rate to remain stable throughout 2013. But, at the same time, he says, one of the factors most likely to slow the economy this year, is sequestration.
"There is no question this is going to be anchor around the neck of growth for the next few quarters. So to the extend the economy is vibrant job to the extent there are jobs available to the extend that people expect to see salary increases wage increases all of that is going to have a wet blanket thrown over it."
Nakosteen says that Massachusetts stands to be one of the states hardest hit by sequestration as its economy is disproportionately reliant on technology, health and higher education jobs. All sectors that are likely to take a substantial funding cut. Even if sequestration doesn't happen, Nakosteen says the state will still feel its impacts, as many businesses have already taken irreversible steps to prepare for it. But Nakosteen remains optimistic about 2013, predicting that while unemployment won't improve, the state will experience modest economic growth.