Unemployment: A Tale of Two States
Massachusetts and Connecticut are on widely divergent paths in their respective recoveries from the great recession.
While Connecticut continues a slow and painful slog to get back lost jobs, Massachusetts is surging ahead.
As of March–six years after the end of the recession–Connecticut had recovered just 77% of all jobs lost during the downturn.
Massachusetts? Their recovery rate is an incredible 240%, while the U.S. average is 160%.
Unemployment rates in each state are also tracking in different directions.
Since hitting a post-recession low of 5.3% last September, Connecticut’s jobless rate has risen steadily and now stands at 5.7%, the highest of the New England states and well above the U.S. average of 5%.
Over the same period, Massachusetts’ unemployment rate has fallen from 4.8% to 4.4%.
This pronounced difference in labor market performance translates into a roughly 3% drop in Connecticut median single-family housing prices for 2015, whereas Massachusetts saw an approximate 3% increase.
The exact opposite of Connecticut’s direction, and pretty significant.
It is becoming increasingly apparent that economic weakness in Connecticut is accelerating ahead of the U.S. economy.
Connecticut needs to send similar messages, such as a sustainable state budget--with no tax increases and no anti-business legislation, to begin to do the same.
As Klepper-Smith notes, "it is becoming increasingly apparent that a turning point in Connecticut unemployment was probably reached last Fall, and that economic weakness in the Nutmeg state is accelerating ahead of the U.S. economy.
"That obviously begs the question, 'Why?'
"The answer to that is complex, but the high-profile departure of GE, underperformance in local labor markets, and the state budget battle that grabs headlines on a daily basis, are all contributing factors that speak to significant structural problems that underline the economy."
Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.
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