The slowdown in the national economy is having a trickling effect in Connecticut and will slow projected growth rates, especially job creation, for the next few years, a new report says.
Prior to the recent market turmoil, Connecticut would have been looking at  “a strong recovery in both total output and especially employment by the end of 2013,” including the addition 55,000 jobs over the next few years, according to a study released Friday by the Connecticut Center for Economic Analysis.
But all of that has changed now, and any hope for a strong recovery appears to be diminished.
Instead, the Connecticut Center for Economic Analysis projects employment to rise to 1,642,000 or 20,000 above current levels by the second quarter of 2013.
Comparatively, the state lost an estimated 105,000 to 120,000 jobs during the Great Recession. Â
“The financial chaos of this summer has again sucked confidence out of the equity markets, and the continuing crisis in sovereign debt in the European Union has scared investors into the safest available havens-gold and American Treasuries,” the report said. “Virtually all economic forecasts, both for the United States and for the global economy, have been trimmed back. Realistically, Connecticut will not see the improvements it might have seen.”
The report also said the expiration of stimulus funding and anticipated federal spending reductions will also negatively impact the national recovery.Â
New state policies, including a $1.7 billion tax hike, $1 billion cut in fringe benefits for state employees, and several new public works projects, also had an impact on the new forecast.
