Is Gov. Dannel P. Malloy entitled to crow just a bit about Connecticut’s unemployment rate dropping from 9.3 percent to 7.8 percent on his 14-month watch as governor?

“That’s a drop of nearly 20 percent, which is why I, for one, am optimistic that the worst may be behind us,” an upbeat Malloy said Friday, a day after the Department of Labor released the February jobs numbers.

The folks who do economic forecasting are more cautious. They say the unemployment numbers celebrated by Malloy are genuinely good news, but they are one piece of a large, complicated picture.


Malloy was upbeat about most questions Friday…

“I don’t want to get too far out in front in leading the parade, saying this will be a banner year for Connecticut. There are head winds out there,” said Edward J. Deak, a Fairfield University economist.

Housing remains lackluster. Oil prices are rising. The Pentagon is looking to cut expenses, always a concern in a state that produces submarines, helicopters, jet engines and other components of military aircraft.

Even Foxwoods and Mohegan Sun, the two massive tribal casinos in eastern Connecticut, are facing the prospect of new competition in Rhode Island, Massachusetts and New York. Foxwoods is struggling to meet its debts.

“When you are talking to an economist, you are talking to someone who is paid to worry about things,” Deak said.

Deak spoke to the Mirror shortly before he was to conduct a conference call of experts in his role as the Connecticut forecast manager for the New England Economic Partnership.

Fred Carstensen, the director of the Connecticut Center for Economic Analysis at the University of Connecticut, said the jobs gains “are real numbers,” based on actual payrolls. But he, too, said they don’t tell a complete story.

“You have to be very careful with any of these short-term things, especially with this bizarre year we’ve had. It’s so warm, things that normally get curtailed in construction didn’t get curtailed,” he said.

Construction jobs in Connecticut increased by 800 in February, a significant chunk of the 4,900 non-farm jobs created last month, according to the state Department of Labor. The Connecticut labor market also added 5,400 jobs in January.


…but not all.

Malloy spoke to reporters Friday after the monthly meeting of the State Bond Commission, the panel that gives the final go-ahead to borrow funds for capital projects.

“We are, in fact, creating jobs,” Malloy said. “I appreciate the limits that government can have on job creation, but when we advance projects and shovels hit the ground, that’s someone who’s receiving a paycheck. That’s someone who is supporting their family.”

He acknowledged there always is a question of how much credit or blame any elected official is due over economic upticks or downturns. But he said that a state commitment to the Hartford-New Britain busway and other infrastructure projects clearly is boosting construction.

“Government plays a role,” he said. “If we’re talking about an uptick in construction, we’re playing a leading role in that. We made investments in infrastructure that are quite substantial and are leading to employment gains in the construction sector. That’s a reality.”

Senate Minority Leader John McKinney, R-Fairfield, said many factors are driving the improving jobs picture. He said the governor and legislature are due some credit for the economic incentives during last fall’s bipartisan jobs session.

Governors, whether it is a Democrat like Malloy or a Republican like Mitt Romney, the former Bay State governor McKinney supports for president, are too quick to talk about jobs “we created,” McKinney said.

“I think it’s political speak,” McKinney said. “With respect to the private sector, by and large, we set an environment in which jobs can be created or jobs can be lost.”

Malloy is not alone in expressing greater confidence in the economy. In survey data released Friday, U.S. consumers as a whole felt a little better about the economy in late March, despite concerns about rising oil prices.

Good news about jobs is the reason, according to the monthly Thomson Reuters/University of Michigan survey.

“The highest proportion of consumers in the history of the surveys spontaneously reported hearing about employment gains,” according to Thomson Reuters.  “Just 19% expected the jobless rate to increase in the year ahead, the lowest level in more than a decade.”

But even the Michigan numbers were mixed. Consumer attitudes about the current state of economy moved upward, but an index of “expectations” slightly dipped.

“Although consumers are not yet optimistic about future economic prospects, pessimism has recently faded at a rapid pace,” Richard Curtin, the survey’s director, said in a statement. “Perhaps too rapidly, as expected job and income gains may be unrealistically high for the economy to meet.”

Malloy also tempered his enthusiasm Friday.

“I also want to say that I know we’re not out of the woods yet,” Malloy said. “We have miles to go before we sleep, but there are still far too many people in our state looking for work.”

But Malloy also noted that unemployment in Connecticut is dropping faster than the national average of 8.3 percent, an unfamiliar development for a state that historically lags the rest of the nation coming out of deep recessions.

“We now lead the national average, so something in happening,” Malloy said.

National and international dynamics shape the state’s economy, but decisions made by Malloy about fiscal policy and public investments also are an influence, the economists say.

The governor relied on a historic $1.5 billion tax increase, along with some spending cuts, to largely erase an inherited deficit of more than $3 billion.

“That was a gamble on his part and legislators’ part, and it looked like the gamble paid off. It doesn’t look like it had a negative effect,” Deak said. “He chose a course of action, and the course of action seems to have stablilized — not quite righted — but stabilized the financial ship of state.”

Deak said another Malloy gamble is the state’s investment in biosciences, particularly the deal to build a genomics institute on the campus of the University of Connecticut Health Center for The Jackson Laboratory, a world-renowned research institution based in Maine.

It will be years before the return on that investment can be assessed, but Deak said Malloy’s promotion of the initiative and his visits to businesses around the state may have some immediate benefit in business confidence.

“I think the biggest thing that has helped to change at least some of the attitude is his investment of his own time and effort in meetings around the state, to talk to business leaders, to talk to consumers. That kind of confidence and outreach tends to rub off on the private sector,” Deak said. He added, “It can’t be all smoke and mirrors.”

Carstensen agreed, saying Malloy and his commissioner of economic development, Catherine Smith, get good reviews for opening lines of communication to employers with an aggressive outreach effort.

“Yeah, feeling that someone is paying attention, that you can actually talk about what your concerns are, that you have entrée, is very important,” Carstensen said.

But like Deak, Carstensen said the outreach is only a good first act. Ultimately, he said, the state has to deliver on Malloy’s promise to improve the regulatory climate for business. And that means quicker decisions on permits.

“Here the Malloy administration is in its second legislative session,” Carstensen said. “Are they addressing that? That’s what the business community is going to say. Where is the beef? Where is the legislative action?”

The administration says the Department of Energy and Environmental Protection and the Department of Economic and Community Development are acting much quicker on permits.

Carstensen said the effort clearly is there, but he is concerned that Malloy may be too distracted by his push for reforming teacher tenure rules and the state’s arcane laws on liquor pricing.

“I worry a little bit about the context of getting the economy strong,” Carstensen said. “There is a danger of losing the sense of urgency the governor and Commissioner Smith brought to the area in their first year. Putting other things on the table may be diverting our attention.”

Mark is the Capitol Bureau Chief and a co-founder of CT Mirror. He is a frequent contributor to WNPR, a former state politics writer for The Hartford Courant and Journal Inquirer, and contributor for The New York Times.

Leave a comment