Economic growth in New England continues to parallel that of the nation. At the same time, according to some measures, the fortunes of the individual New England states are diverging. Gains are continuing in Massachusetts, while Rhode Island is failing to participate in even the modest recovery occurring elsewhere.
Employment in New England expanded in May, with the payroll job count up 14,300 from April (exhibit 1). After dipping in April, the year-over-year growth rate moved up to 0.7 percent, well below the U.S. May-to-May growth rate of 1.4 percent.
Connecticut, New Hampshire, Vermont, Massachusetts, and Maine all posted year-over-year employment gains, leaving only Rhode Island with fewer jobs in May than a year earlier (-0.8 percent).
Massachusetts is the only New England state with a statistically significant employment gain over the year, up 1.2 percent. Rhode Island’s job losses are not statistically significant, even though they were the steepest among the seven states nationwide with year-over-year employment declines.
New England’s unemployment rate continued to trend downward in May, falling for a fourth consecutive month to 6.8 percent, about a percentage point below its 7.9-percent May 2011 level. Regional unemployment remains more than a percentage point below the national average (exhibit 2).
The jobless rate rose in Connecticut and Maine, held steady in New Hampshire and Vermont (keeping them among only six states nationwide with rates at or below 5.0 percent), and declined in Massachusetts and Rhode Island. Rhode Island’s rate, 11.0 percent, was second highest in the nation.
Construction remains New England’s poorest-performing supersector in terms of job growth over the 12 months ending in May, with employment down 2.5 percent (exhibit 3). Year-over-year declines also continued in financial activities and government, with the latter concentrated in local government.
On the plus side, professional and business services continues to show the strongest employment growth in New England (up 3.4 percent year-over-year) as well as in the nation.
On net, only private education and health services is ahead of its pre-recession employment level.
Headline inflation in the Boston metro area, as in the nation, continued to come down on a year-over-year basis in May, with the cost of the market basket rising 0.8 percent in Greater Boston and 1.7 percent nationwide (exhibit 5).
In the region and nationally, energy prices are bringing down the rate of inflation. The Boston index for energy declined 6.5 percent over the year as compared with a 3.9 percent drop nationwide.
Residential real estate markets are showing some improvement in New England, with construction indicators showing increases from a year ago and the year-over-year pace of house price declines generally moderating.
The FHFA house price index edged down from Q4 to Q1 in the nation, region, and all six New England states, nearly erasing the gains registered in the two previous quarters. Nevertheless, house prices continued to improve on a year-over-year basis, with the pace of decline moderating in both New England (from -2.0 to -1.2 percent) and the nation (from -2.9 to -1.4 percent) (exhibit 4).
After increasing for two quarters, the foreclosure initiation rate held steady in New England in Q1 2012, while declining nationwide. At 0.9 percent, the regional rate remains 0.1 percentage points below that of the nation.
The dollar value of merchandise exports from New England edged upward in Q1 2012, following decreases in the two previous quarters and came in 3.8 percent above its year-earlier level.
Nationally, exports decreased in Q1 for the first time in 11 quarters but were still 8.7 percent higher than in Q1 2011 (exhibit 6).
The use of these data does not necessarily imply the Bank's endorsement.