BOSTON — The Massachusetts economy is running well despite signs of a slowdown and while no single factor is holding the economy back, analysts said the combination of a labor shortage, trade tensions, an impeachment inquiry and more could darken the outlook.
Economists at MassBenchmarks reported Wednesday that "despite the recent slowdown and the uncertainties on the horizon, the performance of the Massachusetts economy remains solid."
MassBenchmarks board members discussed the factors contributing to a slowdown — the state economy grew at a 1.4 percent annualized rate in the second quarter, slowing from a 2.7 percent annualized rate in the first quarter — and agreed "that labor supply is playing a role in tempering economic growth."
The state's low 2.9 percent unemployment rate means some employers could have a harder time finding workers to fill jobs, leading to employment growth that is "slowing significantly." But on its own, the tight labor market is not enough to drive the economy down.
MassBenchmarks pointed to other sources of uncertainty — global trade tensions, the looming split between the United Kingdom and the European Union, instability of global financial markets and the U.S. House's ongoing impeachment inquiry — that, when combined, have a damning effect on the economic outlook.
"While any single one of these 'wild cards' might not have much influence over our economic outlook, together they can be expected to exert downward pressure on business investment and consumer confidence over time," the economists wrote in a summary of their most recent discussion.