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    Thursday, May 09, 2024

    Report sees bigger statewide job gains over next year

    A new analysis of Connecticut’s economy suggests the state could gain 23,000 jobs over the next year, though the Norwich-New London area likely won’t start adding positions until the second half of 2014.

    The winter edition of The Connecticut Economy, a University of Connecticut publication released Tuesday, noted that next year’s statewide gains will likely trump this year’s job growth, which numbered 16,000 above year-ago levels through the third quarter.

    Steven P. Lanza, managing editor of the quarterly, said in the publication that “2014 should bring continued economic improvement to the state unless D.C. politicians manage to pull the rug out from under a recovery that is still struggling to hit its stride.”

    Lanza noted that Connecticut pays a high price for the kind of economic turmoil that has occurred over the past three years with the 2011 debt ceiling crisis, the 2012 fiscal cliff maneuvering and this year’s partial government shutdown. Lanza’s analysis shows that the state, which has recovered only a little more than half of the 120,000 jobs it lost during the Great Recession, would have been two-thirds the way to full recovery without the machinations in Washington.

    “Uncertainty ... has cost Connecticut a year’s worth of employment recovery,” or about 20,000 jobs, Lanza said.

    The unemployment rate of 8.1 percent statewide in the third quarter would have been about half a percent lower without the budget battles, he said.

    “We don’t bargain for our elected officials being part of the problem — at considerable expense to the economy — rather than part of the solution,” he added.

    In the Norwich-New London region that includes Westerly, about 4,000 jobs were lost in the third quarter, according to labor data supplied in the report. A chart in the report indicates continued job losses may occur in the region over the next few months before evening out in the spring, with a trend reversal in the third quarter of 2014.

    Predictions for the region, however, show a gradual decline in the local unemployment rate throughout the next four quarters, to somewhere around 7.5 percent by the middle of next year.

    Lanza’s predictions are more pessimistic than the job-number projections released last month by the Eastern Connecticut Workforce Investment Board. But Lanza acknowledged the possibility that employment trends in the region could start edging up as early as the final quarter of this year.

    The workforce board report, produced in collaboration with New Haven-based DataCore Partners LLC, declared that the region’s five-year jobs slide was finally over, barring unforeseen major downsizings among large local employers.

    DataCore principal Don Klepper-Smith, a leading statewide economist, said in the report that May 2013 marked a trough in the region’s job losses and that Norwich-New London had finally hit a “firm bottom,” ready for upward growth, with the possibility of a few backslides along the way.

    During the region’s downward jobs spiral, more than 12,000 positions were lost in the local economy and the region’s unemployment rate more than doubled.

    The workforce board’s report was released before the latest job figures in September and October were available to analyze. November’s statewide jobs report has yet to be released.

    Lanza noted that the state’s jobs recovery over the next year is dependent to a great extent on the national economy, which is predicted to grow at a 2.8 percent annual rate. Even at a more pessimistic rate, however, Lanza said Connecticut should recover 20,000 jobs over the next year.

    He noted, however, that the state economy appeared to weaken over the summer as the government shutdown loomed and the nation appeared on the brink of default. Jobs statewide fell in both August and September while barely budging in October.

    “The slowdown in Connecticut job growth this past summer could be an early harbinger of the troubles the state economy might face should Washington again allow the federal government to grind to a halt,” Lanza said.

    l.howard@theday.com

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