New Hampshire economy stumbled earlier this year; is a recession in sight?

During a recession, store closing signs, such as these recent signs on Hooksett Road in Manchester, dominate the landscape. (Photo by Mark Hayward)

For the first three months of this year, the growth of the New Hampshire economy turned negative, a scant, annual-rate drop of 0.1%.

If growth over the subsequent three months remained negative, the New Hampshire economy would fit the definition of a recession: two consecutive quarters of negative growth. A cause for concern? Up the anxiety meds? Sell everything?

On the bright side, the percentage drop in the gross state product of New Hampshire was the smallest of all six New England states, according to data from the U.S. Bureau of Economic Analysis. (The worst drop was Maine at 1.2%.)

More recent economic indicators are mixed. And experts doubt that New Hampshire or the United States is on the verge of a recession.

“It might just be a one-off,” said Greg Randolph, a professor of economics at Southern New Hampshire University. Twice in the last 15 years, the national economy has experienced one quarter of economic contraction, only to rebound in the next, he noted.

And other indicators — jobs and paychecks — don’t scream recession.

“Going through the rest of the data, there’s not a lot there to give you pause for concern, at least for the moment,” Randolph said.

He noted that the drop in the New Hampshire economy coincides with the 0.5% fall in the national gross domestic product over the winter quarter. That fall was attributed to a surge in imports, as businesses and retailers stocked up on product in anticipation of Trump-administration tariffs.

Imports reflect negatively on GDP.

Nationally, the GDP seems to be on the rebound. In late July, the federal government issued an advanced estimate that said the national economy grew by an annualized rate of 3% in the second quarter, thanks to drops in imports and increased consumer spending.

Measures of second-quarter state GDP won’t be available until late September.

About this series:“The Pulse” is an exclusive feature of NH Business Review that examines local and national data to track New Hampshire’s economy.Each month, the series examines an economic trend based on the latest data. On a quarterly basis, “The Pulse” will report key economic indicators such as employment, inflation and economic growth for the New Hampshire economy for a more expansive review that includes several informational graphics.“The Pulse” focuses on three key indicators: prices, output and labor. It will also feature a wild card category.  One of the six will change every quarter in an effort to capture data that gives additional insight.

Other economic gauges for the state aren’t as optimistic.

Permits for new homes, whether standalone houses or apartment units, dropped in June.

This month, the Pulse looked at the Canada-U.S. border crossings frequently used by New Hampshire visitors. Border crossings in Vermont dropped 24% during the first half of this year compared to the same period in 2024.

President Trump’s treatment of Canada — his suggestion it should become a 51st state and his hard-knuckled trade stance — has angered much of the country, according to media reports.

Hotels and inns in the Mount Washington Valley have long catered to Canadians; many fly the maple leaf alongside the U.S. flag to entice customers.

They are not having a great season.

Rates checked on the demand-pricing Bookings.com website show significant price cutting for dates in late July, the prime summer tourist season, at several Mount Washington Valley resorts.

In Intervale, the Swiss Chalets Village has seen fewer Canadians this year, said manager Jay P., but she did not want to venture a reason.

“Bookings are down almost like 20% less than last year,” the manager said.

While unemployment remained low, job-related numbers weakened compared to a year ago.

The seasonably adjusted unemployment rate for June was 3.1%, compared to 2.5% in June 2024.

The Pulse finds that, while the average 2025 second quarter workforce grew by 4,400 people compared to the 2024 spring quarter, the number of unemployed grew by even more: 4,650.

The dip in employment didn’t affect paychecks, which continued to climb.

The weekly paycheck for a blue-collar production worker reached $1,092, the highest of two years of data compiled by the New Hampshire Department of Employment Security. It is $54 more than the June 2024 paycheck.

That increase of 5.2% outpaces the annual inflation rate of 2.8%, as measured in the second quarter.

Anytime the growth in paychecks outpace the rate of inflation, it ends up being a plus for the worker.

The 2.8% annualized inflation rate for the quarter represents the lowest in five quarters and is on par with the most recent inflation rate for the country as a whole, 2.7% in June.

Of all the six measurements of The Pulse, the data for gross state product is the oldest. The latest measurement, released in late June by the U.S. Bureau of Economic Analysis, reports the total of goods and services produced in New Hampshire during the months of January through March, a lag time of three months.

It showed drops in the construction, durable goods, retail, health care and accommodations sectors and growth in information, real estate and professional/scientific sectors.