For New England, wage increases are outpacing declining inflation, according to the latest New England Economic Conditions report, released last week by the Federal Reserve Bank of Boston.
Even so consumer confidence last month “was down slightly” from a year earlier, while nationally it increased by a small margin, the Boston Fed reports.
The Federal Reserve Bank of Boston releases its report on New England Economic Conditions regularly, along with various articles throughout the month on several aspects of the region’s economy.
The Consumer Price Index for all-items (inflation) year-over-year, the report says was “roughly in the vicinity of 2 percent from May 2023 to January 2024, marking a considerable moderation from its recent peak of nearly 8 percent.” Since mid-2020, the Boston Fed says, New England’s inflation has been about a full point lower than the national average.
According to the Bureau of Labor Statistics, wages and salaries increased in the Boston-Worcester-Providence area by 3.4 percent from December 2022-December 2023, less than the Northeast overall (3.9 percent), and the United States (4.3 percent).
Wage and salary increases are often tied to minimum wage, according to Connecticut officials. Connecticut has the highest minimum wage in New England, $15.69. Those officials note that as minimum wage increases it pressure business and industry to increase wages and salaries.
Connecticut’s minimum wage is tied inflation, increasing from $15 per hour in 2023. Massachusetts minimum wage has remains steady in 2024 at $15. Maine minimum wage increases from $13.80 to $14.15; Rhode Island minimum wage increases from $13 to $14; and Vermont increases from $13.10 to $13.67.
Only New Hampshire has remained low and static. Its minimum wage has not increased in 15 years and remains at the federal minimum of $7.25 an hour.
Here are other findings in the Boston Fed’s report:
- Only Rhode Island and Vermont payroll employment has not recovered totally from pre-pandemic levels.
- Unemployment for the region increased 0.2 percent to 2.9 percent.
- The small increase in unemployment rate in Massachusetts, Rhode Island and Vermont, the report says, coincides with a small increase in labor force participation, suggesting more job seekers are entering the labor market, rather than an increase in layoffs, or employee resignations.
- Single family housing permits were up nearly 15 percent in January from the previous year, but still were considerably lower than 2021 and 2022 averages. Nationally, the report says, single family permits rose “a robust 43 percent) nationally, but still below 2021 and 2022 averages.
- Multi-family permits also rose, 12 percent in New England and 22 percent nationwide, but still below “post-2020 highs.”
- House prices and rental rates in New England continue to rise. The report notes that the “First District Beige Book contacts, the recent acceleration in house prices stems from a dearth of inventories combined with fairly healthy buyer demand.”
- Consumer confidence, as measured by what the Fed calls the “Situation Index” says consumer confidence has been “flat” in New England and the country since April 2022, with expectations that the “region’s consumers are pessimistic about the direction of the economy.”