While the Federal Reserve Board can be “patient” in raising interest rates—“patient” is their descriptive term for their outlook on interest-rate policy—workers have had to be patient in waiting for jobs to return. The past year has exhibited a dichotomy between the product and the labor markets. While GDP, manufacturing output, corporate profits, and stock prices have soared, labor markets have languished. By some measures, this dichotomy has been even more pronounced in Massachusetts. The Bloomberg stock index for Massachusetts, for example, outperformed the national NASDAQ, Dow Jones, and S&P 500 indexes, even while employment continued to decline. The relative weakness of job and income growth in the state reflects the state’s concentration in the production of equipment related to information-processing technology, which crashed when the bubble burst in 2000.
Clayton-Matthews, Alan, "Economic Currents: The State of the State Economy" (2004). Public Policy and Public Affairs Faculty Publication Series. 39.
University of Massachusetts
Published in MassBenchmarks, Vol. 6, No. 4, pp. 4-11: http://www.massbenchmarks.org/publications/issues/vol6i4/3.pdf.