September 6, 2017

Economist: Long-awaited CT job recovery will hit in 2019

Contributed photo
Contributed photo
Don Klepper-Smith, chief economist and director of research at DataCore Partners and an advisor to Farmington Bank.

At Connecticut's current pace of job creation, the state will recover all of the jobs it lost during 2007-2009 recession by early 2019, economist Don Klepper-Smith said Wednesday.

The state has recovered 82 percent of the jobs it lost and has another 21,000 jobs to go.

That recovery pace has lagged behind most states. All other New England states have recovered their recessionary job losses and gained some additional net jobs.

As of July, Rhode Island had the second-slowest New England recovery pace, at 109 percent. Massachusetts is performing the best, at 303 percent.

Klepper-Smith, chief economist and director of research at DataCore Partners, highlighted those stats during a quarterly webinar he conducts for Farmington Bank.

Massachusetts' good fortune has translated to a better recovery rate in the Springfield labor market area when compared with the Hartford area.

Springfield's job recovery of 195 percent has kept pace with the national average, while Hartford's is at 111 percent.

"We have to keep in mind that economic development we have in Hartford is a function of what's going on statewide and Springfield is also a function of what's happening statewide," Klepper-Smith said. "[Springfield's] just an area of growth and they're benefitting from some of the economic development policies that are promoting growth."

While Connecticut is lagging, there are bright spots.

Despite uncertainty caused by the state's ongoing budget stalemate, Klepper-Smith said Connecticut's job growth in key areas such as business and professional services and health care is important, and said the state's "engines of economic growth have performed admirably over the past three years."

Single-family home sales in Hartford County are up almost 9 percent year to date (though median prices have dipped), according to the Warren Group.

"I think net-net, the housing market is starting to see some signs of life over the past two months, and that's a positive," Klepper-Smith said.

He said Connecticut's defense sector is also likely to benefit from Trump administration policies.

Klepper-Smith predicted that nationally, 2017 will be another year of "modest economic recovery," with GDP growth in the range of 2 percent to 2.5 percent.

Also on the national front, the odds of recession are low and consumer confidence is up 24 percent through July, which is approaching levels last seen in 2003-2005.

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