We're hitting a speed bump on the road to recovery, and things are going to slow down for a while: maybe 6 to 12 months: before Connecticut's economy picks up again. That's according to Steve Cochrane, managing director at Moody's Analytics, speaking last month at the Fairfield County Economic Summit & Outlook in Stamford.
"The economy is recovering, but the pace has slowed and the outlook has tempered a bit," said Cochrane. He noted that by the end of the year, the nation's unemployment rate could scrape 10% again and that while the labor force is actually growing, it's not enough to accommodate everyone who is seeking a job.
Cochrane also pointed out that Connecticut's labor market is weak. Unemployment claims rose in August, underlining, he said, "the fragility of the economy in Connecticut."
Businesses here and nationwide are uncertain about federal tax and regulatory policy, and that means they're reluctant to start adding jobs again. Small businesses, in particular, are still having trouble accessing credit.
With the slowdown, Moody's is revising its forecasts downward, from a previous 3% GDP growth rate in 2010 to 2.7%; and from a previous forecast of 4% GDP growth in 2011 to 3.1%.
The good news, according to Cochrane, is that a double-dip recession is unlikely. And with corporate profit growth strengthening, he believes that jobs will soon follow.
"There is reason for optimism," he said. "A slow turnaround is coming. Connecticut will trail the U.S. in 2011, partly because of uncertainties in the financial services industry. But by 2012, things will begin to accelerate again."
Dave Conrad is a senior editor at CBIA. He can be reached at email@example.com.