Connecticut struggled for the past decade to recover all of the jobs it lost during the Great Recession, and now facing a much deeper hole and structural shifts, it may not get back there for at least another decade.
That’s according to DataCore Partners economist Don Klepper-Smith, who wrote in a note to clients on Monday that Connecticut is likely to have a relatively strong economy in 2021, but that the rest of the 2020s could be weaker.
“Going forward, I expect that 2021 will probably represent the best year in the next 10 as the State’s economy rebounds and finds equilibrium,” Klepper-Smith wrote. “However, it is highly unlikely that Connecticut will return to its long-term growth rate of about 1% for the balance of the decade, suggesting in strong terms that a long-term job peak may have been reached in March 2008 at 1,720,900 jobs.”
As of January, Connecticut had recovered 166,800 nonfarm jobs of the 292,400 lost in March and April 2020, according to the Department of Labor. That leaves roughly 125,000 more jobs to get back to Feb. 2020 pre-pandemic levels, and more to get back to early 2008 levels.
Klepper-Smith said adding that many jobs will be a “formidable challenge,” due to longer term structural trends like outmigration, higher costs of doing business and an aging population.
Klepper-Smith, who chaired Republican Gov. M. Jodi Rell’s Economic Advisory Council in the late 2010s, argued that the state should rethink its economic development strategies. He also argued that a proposed statewide property tax would lead to further outmigration “unless the state embraces a sense of fiscal restraint.”
