State’s recovery picks up speed, but still has years to go
Hartford — The good news is that Connecticut’s economic rebound is accelerating.
The bad news, according to the University of Connecticut’s latest quarterly economic journal, is that the pace still remains slower than any recovery in recent history — and it will take several more years to undo the damage of the last recession.
Connecticut can expect to gain about 2,300 jobs per quarter in 2012, or about 9,200 for the year. That’s better than the 8,600 jobs, or 2,150 per quarter gained last year.
“These are not numbers to write home about,” economist Steve Lanza, publisher of The Connecticut Economy, said Friday during a presentation of the Spring 2012 issue at The Hartford Club. “That’s about half of what we would expect to see if the economy was really healthy.”
It’s also less than the more than 12,000-plus jobs Connecticut gained in 2010 — the first full calendar year after the last recession — when the economy still was buoyed artificially by huge federal stimulus dollars.
The state has regained about one-quarter of the nearly 120,000 jobs lost in the last recession. And at the current pace, Lanza said, it will be several more years before Connecticut regains the rest.
A recent Wall Street Journal survey of 50 leading economists projected the nation’s gross domestic product — the value of all goods and services produced — should rise by a modest 2.2 percent early this year, climbing to 2.6 percent growth by the end of 2012.
Besides the expired federal stimulus, “housing remains moribund, Europe is teetering on recession and, amid fears of a nuclear Iran, gas prices are on the rise,” UConn economists wrote.
Another measure of joblessness, the insured unemployment rate has been trending downward quickly.
Only about 40 percent of Connecticut’s unemployed still are collecting benefits, marking the lowest ratio since the late 1980s, Lanza said. “That means there are a lot of folks out there who have exhausted their unemployment benefits,” he said.
The economy appeared to be growing at a faster pace late last year, but much of that was “illusory,” according to the UConn journal. But it also noted that many private businesses built their inventories up around the holiday shopping season to offset a drawing down on their supplies that occurred earlier in 2011.
Still, the economic recovery is accelerating, and there are some factors that could push things along even faster.
“Election-year posturing could put both political parties on their best behavior,” the journal states. “Housing could finally turn the corner this year, and after doing much repair work on their balance sheets, households could really ramp up spending.”
Under a more optimistic scenario, Connecticut could gain as many as 11,000 jobs this year, which is better, but still well off the pace of past recoveries, Lanza said.
The state also can point to job growth in an increasing number of fields, including: accommodation and food services, wholesale and retail sales, arts and entertainment, and professional and business services. Health care, which fared among the best during the recession, also remains strong, Lanza said.
Another economic voice at the university, the Connecticut Center for Economic Analysis, reported last month that key state-sponsored projects could play a key role in speeding up the recovery in 2012.
Gov. Dannel P. Malloy and the legislature agreed during the regular 2011 legislative session to invest $864 million to revitalize the UConn Health Center’s Farmington campus, and then committed another $291 million in an October special session to help develop a new genetics research facility for The Jackson Laboratory on the campus.
Plans also are progressing for a $567 million rapid transit bus line linking New Britain and Hartford, a project expected to relieve commuter congestion on Interstate 84 in Greater Hartford.
These initiatives alone will add another 7,000 direct and indirect jobs to the already expected job creation of 11,000 over the eight quarters from September 2011 to September 2013, particularly through the addition of construction jobs, the center estimates.
Most of the earliest jobs, those created in 2012, will be tied to engineering, architectural and construction work getting under way this spring and summer.
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