Salaries in New England are growing faster than inflation for the second consecutive quarter, according to the Federal Reserve Bank of Boston’s latest report on New England’s economic conditions.
Meanwhile, the report also shows a shrinking New England labor force, signaling “a persistent worker shortage in the region.”
The report shows a dramatic difference in inflation in New England and the nation, an aging workforce that’s leading to worker shortages, the lowest regional unemployment rate in nearly 25 years, and while inflation continues to drop housing costs continue to rise.
The report dated Nov. 28, was released yesterday.
Here are some of the report’s findings:
- As of October, of this year, the report says inflation in New England (as defined by the Consumer Price Index for All Urban Consumers) was 2 percent, compared to 7 percent a year ago. According to the report, while inflation moderated in all other expenditure categories, New England’s rental housing rates grew three times as fast as the pre-pandemic rate.
- During the third quarter of 2023, New England wages grew 4 percent since last year, after growing 5.3 percent a year ago. The moderation in wages mirrored dropping inflation, with wages still double the inflation rate.
- Employment growth in New England “decelerated” over the last year and “lagged national averages. Weaker employment growth in the retail, health care and social assistance, and accommodation and food services industries since the pandemic primarily accounted for the lag.”
- While most New England states had regained their pre-pandemic employment, Rhode Island and Vermont had yet to recover losses “sustained during the pandemic.”
- Unemployment in New England fell from 3.5 percent in January 2023 to 2.8 percent in October 2023, compared to a 3.4 percent unemployment rate nationally in January and 3.9 percent in October.
- “The 2.8 percent unemployment rate marked the lowest since 2000 and signaled a shortage of job seekers willing and able to fill open vacancies…In New England, an aging population, retirements, and weaker participation recovery across all age groups have led to a widening gap between the current and pre=pandemic labor force participation.”
