A Look At The Future Of Connecticut's Economy

2010 was supposed to be a year of economic recovery, after the great recession.But the modest pace of change has been a big disappointment to many, especially those still without a job. WNPR’s business reporter Harriet Jones spoke to some experts about the year that’s just finishing, and what we might expect in 2011.

2010 began well, and the early spring saw promising job numbers, both nationally and in Connecticut. But then the setbacks began. Peter Gioia, chief economist for the Connecticut Business and Industry Association says he believes uncertainty was to blame.

“Job growth sort of fell off a cliff in April, and I think that was coordinated with certain federal changes. Healthcare reform was passed, the financial services reform was passed. I think business people got really, really worried. That was coupled with weak demand and difficulty in credit availability and that certainly has made this recovery more painful than it otherwise would have been.”

As the surveys stand right now, Connecticut added back 10,600 jobs this year, a tenth of what’s been lost since 2008. Modest job growth hasn’t been the only surprise this year, according to Don Klepper Smith of Datacore Partners in New Haven.

“When you move into economic recovery, jobs usually create income, income creates confidence. The biggest surprise is that when you look at the income side of the equation, income in this recovery has been non-existent. The broadest measure of consumer spending power in Connecticut, real disposable income after taxes adjusted for inflation is down 1.5%. So here’s we’re looking at economic recovery, but where’s the beef?”

But then again when we look back at 2010, is the glass half empty, or is it half full?  Steven Lanza edits UConn’s quarterly publication, The Connecticut Economy.

“What often gets missed is the resilience of the economy and its ability to have bounced back from the depths of this great recession. That often gets lost, simply because we still have so much further to go simply to get back to where we were when things started to go to heck in a hand-basket back in 2008.”

He says job growth will probably continue at only a modest pace in 2011.

“If we’re looking at growth between three and four percent, then Connecticut could be adding anywhere from 12 to 25 thousand jobs over the course of the next year. And I think 25 could be a stretch, the economy would really have to start heating up.”

That’s echoed by Peter Gioia who believes we have to look further ahead for more impressive gains.

“2012 has some opportunity for some serious pick-up, but it’s probably going to be much more moderate in 2011. I think it’ll be better than 2010, but we’re probably looking somewhere’s between 11 and 12,500 jobs to be added, and when you have 100,000 people who lost their jobs during the recession, that’s real slow and that’s real painful for them.”

Don Klepper Smith agrees it may take a while before we all begin to feel like the recovery is really taking hold.

"We want to see economic recovery become more tangible. And what that means is job growth and income growth. And the fundamentals are indicating we’re moving in that direction, but it’s painfully slow, the process for many. It’s sort of like watching grass grow—it’s painfully slow."

For WNPR, I'm Harriet Jones.