Inflation in New England, while inching lower, continues to run stubbornly higher than the nation. Even so, Consumer Confidence in New England is high, driven by future expectations, according to the Federal Reserve Bank of Boston’s latest report on New England Economic Conditions.
The report, which covers the period from October 2023 to this October, was recently released by the Boston Fed. It also shows unemployment stabilizing regionally, wages trending higher, and housing prices continuing to rise faster than the U.S.
It is housing costs that are driving inflation. Shelter prices increased nationally by 4.9 percent, and in New England, 6.4 percent from September to September, according to the Federal Housing Finance Agency (FHFA).
Year over year inflation (October to October) in New England was 3.3 percent, down from 3.4 percent in September, according to the Boston Fed. Nationally, inflation year over year was 2.6 percent.
Here are some of the key findings in the Federal Reserve Bank of Boston’s New England Economic Conditions:
- The unemployment rate stood at 3.5 percent in New England and 4.1 percent in the United States reflecting year-over-year increases of 0.1 and 0.3 percentage point, respectively.
- Wages and salaries in the region increased slower than in the U.S., 2.5 percent in New England, year to year, and 3.8 percent in the United States.
- “Consumer confidence in New England and across the United States displayed an upward trend over the 12-month period ending in November 2024.” The Conference Board’s Consumer Confidence Index for the region grew 19 percent. Growth in New England was greater than the United States, the result the Boston Fed said was “primarily to consumers’ improved future expectations.”
- Nationally and regionally, education and health services, leisure and hospitality, construction, and total government services were leading employment gains regionally and nationally. Manufacturing was the only sector experiencing job loss.
- Rent growth rate in the Boston metropolitan area decelerated over the 30-month period ending in October 2024, falling below its pre-pandemic level.
- While home price growth slowed, total home sales remained well below pre-pandemic levels, “suggesting that housing market conditions continued to constrain housing turnovers.”
- According to the Zillow Observed Rent Index, rent growth gradually decelerated in the Boston metropolitan area and United States over the 30-month period ending in October 2024.
- The year-over-year rent growth rate in October in the Boston metro area was 3 percent, modestly slower than the national growth rate for that period and slower than the area’s pre-pandemic rate. House price appreciation also slowed in New England.
- According to the Federal Housing Finance Agency (FHFA) House Price Index regional house prices grew 6.4 percent year-over-year in September 2024, down from 11.5 percent in September 2023 and approaching the pre-pandemic baseline.
- “Despite moderating price growth, total existing home sales remained 30 percent below the 2019 level, indicating that housing market conditions—such as low inventories due to mortgage lock-in effects and high prices—continued to significantly constrain people’s ability to move.”
