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Opinion: Is Connecticut enjoying a sustained recovery?

Fred Carstensen
Fred Carstensen

Fred V. Carstensen is a professor of Finance and Economics and director of the Connecticut Center for Economic Analysis.

Many were startled by the report of 11,500 new jobs in Connecticut in September, the fastest rate of job creation in more than 20 years. Given the timing, coming shortly before the election, many will cynically discount the importance of this information. We do so at our peril.

The remarkable growth in jobs in September — almost entirely in the private sector — when combined with other data, argues that Connecticut is now enjoying real recovery, not only from the doldrums of the Great Recession, but from more than a generation of failing to create net new jobs.

Looking at data on growth in jobs over the last three years, the unusual job growth is not surprising. It might even have been expected. Connecticut has been adding jobs, year over year, since October 2010, for 48 months. Every month.

See the complete story at CT News Junkie.

 

Comments

12 responses to “Opinion: Is Connecticut enjoying a sustained recovery?”

  1. piberman

    Curious that the Center is domiciled at UCON – a state funded facility. Curious about the “timing” of the opinion piece from an “objective” Center. Curious no mention of the historic tax hike and its consequences. Curious no mention of the UBS loss of 2600 jobs despite huge CT funding grants. Curious no mention that the state still remains 45,000 jobs below its pre-Recession levels and whose growth rate is half the national average. Well we could go on but it is curious. We should note for the sake objectivity one observation that all can agree upon. UCON profs are among the very highest paid in the country and to the best of my knowledge no one has claimed that their pay reflects their academic reputation. But the article is “curious”. We’d pay more attention if an economist at a private institution with an acknowledged reputation such as Yale presented this case. But it is curious.

  2. Donald Jones

    Wasn’t Lavielle a UCONN prof?

  3. Mike Mushak

    Wow just wow.

  4. John Hamlin

    I think the voters are able to judge for themselves whether the economy is recovering for them.

  5. independent voice

    Yawn. Let’s closely analyze the realty vs the rhetoric. According to Forbes,

    1. Connecticut ranks #50 – the worst – in annual economic growth.
    2. Government spending is out of control.
    3. Connecticut has run up the fourth largest pile of debts per capita – $27,540.
    4. Barron’s considered Connecticut to be in the worst financial shape than any other State.
    5. Connecticut has one of the worst business climates in the country.
    6. Connecticut is ranked #46 for economic performance and #43 for economic outlook
    7. The Cato Institute gives Malloy an F grade for his economic policies that throttle investors and entrepreneurs

    Let’s not even talk about how CT is continually ranked on top of every national list as the worst state to retire due to the punitive estate, income and property taxes here. It is intriguing how the left will continue to beat the drum and disregard the core plague disrupting progress in the state; high taxes and big spending.

  6. Casey Smith

    What an ironic title…”Is Connecticut enjoying a sustained recovery?”

    “Sustained” and “recovery” used in the same sentence? Really??? That’s not what I’m seeing.

    As Mr. Berman pointed out UBS lost 2600 jobs and state is still short 45,000 jobs it had before 2008. It should come as no surprise to anyone that Yale New Haven is expanding their facility and getting into bio-med. With the economic crunch, they’ve been able to increase their strong hold in the State. That’s not necessarily a bad thing, but the question is what kind of jobs are they bringing to the table? Are these new jobs local residents can do or are they in an highly specific area requiring expertise that would have people from out of state moving in? It’s nice to have 10, 20, 30 or what have you new positions, but if they are all in quantum mechanics or astro-physics, does that really help the local population? So, I’m skeptical like Mr. Berman about this sudden increase in “new jobs”.

    And of course the timing is very convenient, too.

  7. Mike Mushak

    independent voice, please consider teh source of your statistics. None of them hold up with fact checking, but are just regurgitations of what shows up on GOP mailers. These lists everyone throws around are generated by right wing think tanks and conservative rags, repeated ad nauseum, reinforcing the GOP idea that if you repeat something often enough it will become truth. Barrons is owned by Rupert Murdoch’s NewsCorp, who also own Fox News. The Cato Institute is funded by Koch Industries. Of course they are going to exaggerate CT’s economic woes as their agenda is to get right wing politicians elected! lol.

  8. Ryan

    Mike,
    Even you can’t believe that CT’s economy isn’t on life support. Can you?

  9. NoirwalkVoter

    @piberman
    I have worked with Mr. Carstensen and heard him speak many times. He has never hesitated to criticize State Government when he thought they were heading down the wrong path. His status at UConn does not effect his opinions as an economist.

  10. Oldtimer

    Either we put some faith in Professor Carstenson’s findings or we call him a liar, a shill for the Govenor.

    Some of us, who bothered to read the whole article at CT News Junkie, are inclined to put our faith in Professor Carsteson’s report.

    Others, who are dedicated to replacing Govenor Malloy with a multi-millionaire who thinks first of their interests, choose to call the report “curious”, suggesting they think Carstenson is not a reliable analyst and may be a schill for the governor.

  11. independent voice

    @Mike. As much as I respect your opinions on planning and zoning, I’ll opt to respectfully disagree on the dire financial state of affairs CT faces.

    Federal data released recently demonstrate Connecticut’s economic stats are the slowest in New England and in the country. This is in no doubt due to Dodd-Frank (a de facto un-wind from the Clinton era Community Reinvestment Act) which is wreaking havoc on the financial services industry here. Couple this with CT’s high taxes and bloated spending and what you have is a mass exodus of some of CT’s biggest employers. Yet, Malloy gives us a historic tax increase and refuses to make severe cuts to entitlements and public sector employees (lifetime benefits now rivaling some of Wall street’s most handsomely paid). The malaise can also be witnessed firsthand in Norwalk. How have higher property taxes and the lackluster property values worked out for everyone?

    Let’s keep our fingers crossed that soon to be Governor-Elect Tom Foley can unwind the mess created over the last four years.

  12. piberman

    To Old Timer:

    Its curious that none of the privately employed economists in the region nor the well recongized regional econoists at the NY Fed nor any other of the academic economists in the region have issued a similar “bullish report” on future CT jobs expectations. This alone should raise concerns. Normally when professioal economists make labor force projections they do so with the advise of an economietric model of the economy. Making economic forecasts on simple extrapolations is not concerned acceptable pratice. So I don’t think we should get too excited about this brief article.

    We should note that any state experiencing a deeper recession than the region and/or nation will likely emerge from the natonal recession and eventually post vigorous job gains. Its very unusual for any state to perennially underform the national economy for an extended period but it occasionally happens.

    The real question is whether CT is well positioned for an extended recovery while the national economy persists. And whether state finances are well positioned for the next Recession when the state’s unusual dependence on tax revenues will again induce a major revenue shortfall. Having initiated an unprecedent 2.8 billion tax hike to deal with the last Recession and facing a similar sized deficit in the forthcoming budget cycle here are reasons to be quite concerned. Particularly because ruling elites in Hartford are quite reluctant to curtail state spending. So there are some genuine concerns.

    UBS’s pending departure (building is dark) with 2600 jobs and the office vacancy rate in the County reportedly at about 50% for major buildings together with declining presence of financial services in our County suggests the Fairfield County “golden egg” will have difficulty financing the rest of the state.

    We can thank former Gov. Weicker for introducing the income tax so his supporters could avoid at that time the taxes upwards of 12% on US Treasury bonds – the mainstay of wealthy portfolio holders. The state is now dependent on the income tax to the tune of almost 40% or so. Come the Recessions the results are awesome. New taxes become inevitable to maintain spending levels.
    No relief lies in sight. From either Party. Relief requires less dependence on the income tax as the state’s major source of revenue and willingness to curtail state spending. No one in the political or business arena in CT believes either or both needed adjustments will be made in the foreseeeable future. For a state with a remarkable number of able citizens the gridlock is an unusual outcome.

    Finally, its unclear when the CT economy will regain its pre-Recession status. We’re still 45,000 jobs below our prior levels. With 5 years of a national expansion iunder our belts a recession is not too far distant. So its a pretty good bet that CT will not be able to regain its previous employment level before the onset of the next recession. That’s the critical point to remember. We may well add new jobs for a while but we’ll still be below our pre-Recession levels. A careful professional economist would have made that point rather than pointing out recent job gains.

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