The outlook for the New England economy in 2025 is “modestly optimistic,” according to a series of reports released by the Federal Reserve Bank of Boston over the last several days.
That projection comes with some trepidation about “how national economic policies might change and where long-term interest rates would land.”
The Federal Reserve Bank’s Beige Book, published eight times a year, said in its January 16 report that the economy in New England was “up slightly, prices steady, employment stable, and outlook optimistic on balance.”
Besides the Beige Book, the Federal Reserve Bank of Boston also published its New England Economic Conditions, and its monthly economic update for each of the New England states.
That monthly report showed Rhode Island trailing the remainder of New England in critical categories:
- The Rhode Island unemployment rate for November was 4.6 percent, according to the Federal Reserve Bank of Boston, more than a point higher than New England as a whole (3.5 percent), and higher than the unemployment rate of 4.2 percent nationally. A year ago, Rhode Island’s unemployment rate was 3.4 percent, equal to New England, and lower than the nation’s 3.7 percent.
- Rhode Island’s home prices continued to rise significantly, 10.5 percent in the third quarter, compared to the previous year. For New England it was half the Rhode Island increase, 4.9 percent.
- One explanation for Rhode Island’s home prices may be the total housing permits. For Rhode Island that was an 18.4 percent increase year over year, well below the 34.2 percent increase for New England.
Inflation for New England (3.1 percent), November to November, was slightly higher than the national inflation of 2.7 percent. Fueling inflation in New England continued to be housing, with “shelter” inflation up 6.4 percent, compared to 4.7 percent nationally; and medical at 5.7 percent, compared to 3.1 percent nationally.
Consumer confidence, the Fed said, shows US consumers “cautiously optimistic about the future” but with “reservations about the overall strength of the economy.” In New England, consumer confidence was trending upwards from May through November, “but softened in December 2024,” according to the Conference Board’s Consumer Confidence index.
Nationally, consumer confidence declined steadily through September 2024 but improved for the rest of the year.
