Job Losses Point To Slow Recovery
After losing 4,000 jobs in the second quarter of the year, a University of Connecticut Economist is predicting that the state won’t fully recover from the recession until 2018.
In the latest edition of The Connecticut Economy, Economist and Editor Steve Lanza, opined that it will take six years to recover from the current recession if the state keeps adding about 2,000 per quarter.
Connecticut has been adding jobs at a rate of about 5,000 quarterly, Lanza said admitting that the recent second quarter job loss could just be an “awkward stumble in state’s race to regain jobs.”
He said two traditionally seasonal sectors of the economy, construction and retail trade, hired early thanks to the unusually warm weather which means the typical spring hiring surge never occurred.
As of July, “Retailers continued to add jobs at a fairly brisk pace, but hiring cuts at bars and restaurants suggest that households may be paring back in some areas of discretionary spending,” he suggested.
Other major sectors, such as manufacturing, professional and business services and government, underperformed in the quarter, posting either anemic gains or relatively steep losses. But education and finance did better than average for the recovery.
“Connecticut has (until the latest quarter) enjoyed a more robust recovery this time around than after the last two recessions,” Lanza said.
“At the current rate it will take nearly six more years to recover all the jobs lost in the last recession,” he said. “And we may not be even that lucky. Economists expect tepid GDP growth as far as the eye can see, which would translate into exceedingly sluggish job gains in coming quarters.”
“With growth so slow we shouldn’t have expected much in the way of new Connecticut jobs, 2000 or so perhaps,” Lanza said.
Taken as a whole, the current economic outlook for Connecticut raises only a minor threat of additional near-term job losses, but with economic activity likely to remain unconventionally restrained “don’t expect this lemon-lime unrecovery to give way to the cola-flavored real thing anytime soon,” he warned.
Click here to read the latest issue of The Connecticut Economy.