State’s Recovery Hinges on Confidence
Connecticut’s economic recovery will heat up when businesses feel more confident about consumer demand–which in turn depends on consumers feeling more secure about their jobs. It’s an economic stalemate that’s preventing Connecticut from keeping up with the rest of the country, according to Ryan Sweet, senior economist for Moody’s Analytics.
Speaking on CBIA’s “Business Minute” broadcasts, Sweet says that while the U.S. economy is showing progress after the recession, “businesses are not going out and hiring and investing as aggressively as they should” in a typical recovery.
That’s especially true in Connecticut, where the unemployment rate (9.1%) is higher than the national rate. Still reeling from the Wall Street meltdown, Connecticut is “struggling to find any momentum,” says Sweet.
The economy officially emerged from the recession in June 2009, but with rising gas prices, a stalled housing market, and new state taxes on the way, Connecticut taxpayers—businesses and individual residents—lack the confidence necessary to move the economy forward.
Costs in New England are typically higher than elsewhere in the nation, the region “typically a step behind in a recovery,” says Sweet. Connecticut, he adds, will lag even the Northeast’s recovery.
Because they are lacking confidence in the economy, Connecticut businesses are trying to get as much productivity as possible out of their current workforce without adding jobs, says Sweet.
“Once businesses are secure that consumers are going to come through their doors more often and [are] more confident in the outlook for economy,” says Sweet, “then they will go out and start hiring more aggressively.”
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