Q4 2020: Snapshot of the New England Economy through December 22, 2020
Through November 2020, both the New England region and the United States experienced sharp declines in economic conditions relative to the first months of 2020. Payroll employment dropped and unemployment rates have risen dramatically relative to one year prior, though the November 2020 unemployment rates improved relative to the spring of 2020, when state policies seeking to limit the spread of the coronavirus required business and school closures. Leisure & hospitality employment was affected most among the supersectors. Through the third quarter of 2020, in both the region and the nation home prices appreciated compared to the same period in 2019.
Employment declined more sharply in five of the six New England states than in the nation
The United States and New England experienced sharp declines in payroll employment through November 2020 (Exhibit 1). Payrolls declined 6.1 percent nationally and 8.0 percent regionally between November 2019 and November 2020 (Exhibit 2). Within New England, five of the six states posted job losses greater than the national average. The exception was Connecticut with a decline of 5.7 percent. The largest year-over-year decline was in Massachusetts (-9.1 percent) followed by Vermont (-8.6 percent), New Hampshire (-8.0 percent), and Maine and Rhode Island (both -7.5 percent). However, all six New England states experienced payroll employment increases in November 2020 relative to April 2020, a peak month in the coronavirus pandemic.
Leisure & hospitality job losses in New England surpass national declines
In November, employment decreased year-over-year in every supersector in New England and the United States (Exhibit 3). The leisure & hospitality supersector had the largest declines both regionally (-28.7 percent) and nationally (-19.9 percent). Declines in the leisure & hospitality supersector were larger in five of the six New England states than the national average, ranging across the region from -17.9 percent in Connecticut to -35.1 percent in Vermont. The regional declines in the information and professional & business services supersectors were smaller than the corresponding national losses. Losses in manufacturing were -4.8 percent in both New England and the US. Manufacturing declines ranged from -9.1 percent in Maine to -1.5 percent in Rhode Island. In addition to Maine, New Hampshire (-8.7 percent) was the only other New England state to exceed national manufacturing job losses. Employment losses in all other supersectors in the region exceeded those of the nation.
Unemployment rates increased in all six New England states relative to one year prior
The November 2020 unemployment rate was 6.7 percent nationally and 6.5 percent regionally. All six New England states saw unemployment rate increases between November 2019 and November 2020, with Connecticut posting the largest increase of 4.4 percentage points, landing at 8.2 percent (Exhibit 4). The unemployment rates in Massachusetts (6.7 percent) and Rhode Island (7.3 percent) were also at or above the national average. Maine (5.0 percent), New Hampshire (3.8 percent), and Vermont (3.1 percent) saw rates lower than the national average, but each state had significant increases compared to February 2020.
New Hampshire recorded the fastest house price growth in the region through Q3 2020
Home prices continued to rise in the nation and region, with the regional growth rate narrowly exceeding the national rate for the first time since 2011 (Figure 5). Between the third quarter of 2019 and the third quarter of 2020, home prices increased 4.7 percent nationally and 4.9 percent regionally. All six New England states reported year-over-year appreciation in house prices (Exhibit 6). House price growth in Connecticut (4.2 percent) was the lowest in the region over the period considered. New Hampshire (6.3 percent), Maine (6.1 percent), and Rhode Island (5.5 percent) outpaced the national average house price growth rate.