Projected Economic Growth for Next 3 Years
The Economy
It is said that we are in a recession when your neighbor is unemployed but we are in a depression when you are unemployed.
Where are we and where are we going economically?
The real Gross Domestic Product (GDP) declined by 6.4% in the first quarter of 2009 and by 1.0% in the second quarter. This was largely the result of reduced consumer spending and declines in investments, inventories and construction. Government spending increased during this period.
After declining in 2008 corporate profits increased by 5% in the first quarter of 2009 and by 5.7% in the second quarter. Financial corporate profit grew by 16.7% in the second quarter.
Imports decreased during the first two quarters of 2009. The net deficit on international trade decreased in both the first and second quarters. Total personal income in Boston increased by 6.4% in 2007 but by only 3.7% in 2008 because of the ongoing economic recession. Personal income for the US as a whole increased by 6.0% in 2007 and by 3.4% in 2008. Thus Boston appears to be doing better than the rest of the country but not by much. In terms of per capita income Boston ranked 9th in the nation. Bridgeport/Stamford-Norwalk CT came in first.
The outlook is for increased growth in the economy accompanied by a more sluggish labor market. Below are some of the expectations for the next several years.
The long run outlook for the period 2009 to 2018 is that the CPI will increase at an annual rate of 2.50% and the index for PCE will increase at an annual rate of 2.15%.
Overall expectations are for a constant but lower rate of growth over the next several years. The major area of concern will be unemployment/job creation.
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