A federal agency reported Thursday that Connecticut was the only state with a shrinking economy in 2012, a campaign-ready talking point that one likely Republican challenger quickly turned against Gov. Dannel P. Malloy.

“Just today, we learn from the Bureau of Economic Analysis that Connecticut is the only state in the country where our economy shrank in 2012,” said Senate Minority Leader John McKinney, R-Fairfield. “We’re dead last in economic growth.”

The U.S. Bureau of Economic Analysis released its updated state-by-state analysis of gross domestic product as Malloy and Democratic and Republican legislators held competing press conferences to define the just-completed legislative session.

Connecticut’s GDP shrank by one-tenth of a percentage point.

That is the difference between a flat economy and one that shrank, between being one of nine states slow to recover from the recession and one that stands alone.

And, for McKinney, it is the difference between a good talking point and a great one.

“No, it’s not good news,” Malloy conceded at his press conference.

Malloy took a few minutes to talk about the vagaries of economic data, the historical position New England holds as a region slow to recover from recessions.

He noted that shrinking government spending – something generally applauded by the public — actually played a role in the shrinking economy.

Connecticut’s spending on government shrank by .25 percent, the most in New England and more than 47 other states.

“That has a negative impact, and specifically had a negative impact in 2012,” Malloy said. “So, if you break those numbers out, is it good news? No, it’s not good news, but last year they had us as the ninth fastest growing economy in the country.”

The bureau restated its data.

The governor repeated a positive statistic: The state has added 26,000 private-sector jobs in the last two years, the most in a two-year period since the 1990s, he said.

Manufacturing rebounded, but the finance and insurance sector lagged in the bureau’s report.

“We need to do better,” Malloy said.

The new report gave McKinney the punchier line: “We’re dead last.” 

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.

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