‘A pretty solid report’

But economist wonders how much longer Connecticut’s recovery will last

It’s like waiting for a time bomb to explode.

The nation’s economic recovery is now in its ninth year, and economists such as Donald KlepperSmith are left to wonder how much longer will it last. The average recovery period in the history of the United States is five years, according to Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners and the author of the New Haven Register’s economic scorecard.

“The question isn’t whether we’ll experience another recession in our lifetime,” KlepperSmith said of the average member of the baby boom generation. “The question is when it will happen.”

Last week’s declines in the Dow Jones Industrial Average “shows there may be some cracks,” he said.

But the August edition of the Register’s economic scorecard offers no hints of a coming recession. Six of the eight economic indicators that make up the scorecard were headed in a positive direction during August.

The only negatives on the scorecard, Klepper-Smith said, were a decrease in the size of the labor force in the New Haven Labor Market Area and a drop in consumer confidence.

“After nine years of recovery, this is a pretty solid report,” he said.

Two of the indicators headed in a positive direction during August

“The question isn’t whether we’ll experience another recession in our lifetime,” Klepper-Smith said of the average member of the baby boom generation. “The question is when it will happen.”

were the number of housing permits issued in 14 New Haven-area communities and the median sale price for single-family homes in New Haven County.

The number of housing permits issued in August 2018 — 73 — was nearly two-and-a-half times greater than the number issued during the same period in 2017. Klepper-Smith credits increased interest by developers in building flexible housing alternatives, such as apartments and condominiums for younger workers who aren’t ready to buy a single-family home.

“Sales of single-family homes have been flat for this year,” he said. “But median sale prices are up.”

The median sale price for single-family homes sold in New Haven County during August was $241,000. That a 4.8 percent, or $11,000, increase compared to the median sale price for August 2017.

Warren Group Chief Executive Officer Timothy Warren said the inventory of single-family homes on the market is lagging behind

the number of people looking to buy homes.

“If inventory fails to keep up with demand — like we’ve seen in the last few months — year-over-year price gains could continue for a while longer,” Warren said in a statement.

Increased median sale prices for single-family homes translates into greater equity for existing homeowners, according to Klepper-Smith. And that increase in home equity could translate into increased consumer spending in the coming months, he said.

“They may not do it right away, but some people may look to tap into that increased home value by taking out home equity loans,” Klepper-Smith said. That would be a positive for the Connecticut economy, which has seen consumer spending power remain relatively flat, he said.