Federal data suggests the state’s economic growth last year was actually only about a quarter of what was originally estimated.
Connecticut could see its job growth actually decline this year and next, according to a dire new forecast from UConn’s Center for Economic Analysis.
The outlook is based on newly revised federal data from the Bureau of Economic Analysis, which suggests the state’s economic growth last year was actually only about a quarter of what was originally estimated. That positions Connecticut as one of the slowest growing economy in the Northeast.
"All of a sudden, the optimism shifted to a much less optimistic outlook," said study author Peter Gunther.
The revised data has lead the CCEA to drastically downgrade its jobs forecast. Instead of adding 44,000 jobs this year and next, which the same study was predicting earlier this year, now Gunther and co-author Fred Carstensen said the state could even begin to lose employment.
But it’s not exactly clear why the BEA’s numbers changed so much.
"Average wages in manufacturing were up nicely, about 12 percent," said Gunther, "and inflation hasn’t been robust enough to eat away at that kind of growth. Nor was there a sufficient cut in employment in manufacturing to hurt in that sort of way – nor in construction."
But if the federal estimate holds, it's very gloomy news for Connecticut. The report also warns that hiking taxes in the state’s upcoming biennial budget could do further damage to the economic outlook.
