The Middletown Press (Middletown, CT)
‘DIGGING OUR WAY OUT’
When will Connecticut return to pre-pandemic employment levels?
The good news? Depending on how you look at it, Connecticut may have about 170,000 more jobs today than the official figure the state publishes each month.
The bad news? Any way you count them, Gov. Ned Lamont does not expect businesses to hire back all the people they laid off during the COVID-19 pandemic any time soon.
In an economic forecast Wednesday accompanying his biennial budget proposal, Lamont indicated he expects the state to recover 64,400 jobs over a 12-month stretch starting this June, with hiring to slow significantly for a few years after that.
Lamont is working with official figures of 291,000 job losses in Connecticut between February and April of 2020, with only 183,000 of those workers back in action as of November. That leaves a shortfall of roughly 108,000 jobs.
Alongside the traditional job count estimates, the Wednesday report includes people who work for themselves at home based on surveys of hundreds of households statewide. That cohort pushed Connecticut employment to 1.8 million jobs on average last year — about 170,000 more than the 1.63 million jobs the state uses as its official jobs count.
“We’re seeing a structural change in our economy in light of this pandemic,” said Brian Marks, an economics professor at the University of New Haven and a Fairfield resident. “There are a lot of firms that, while they would like people to return to work in Manhattan, there’s going to be some level of resistance; and so we may see some continued strength in ... certain segments of the housing market here in Connecticut, because we have the infrastructure to provide stay-at-home (opportunities).”
‘Flat as a pancake’
Through the first nine months of 2020, Connecticut ranked in the middle of the pack both nationally and among Northeast states for economic output, as U.S. Department of Commerce economists estimate a 3-percent reduction in gross state product. That amounted to a $7.1 billion shortfall from the annualized GDP total entering 2020, which Connecticut would recoup this year if the budget forecast used by Lamont is accurate.
Lamont’s budget team is projecting the state economy to boom in the back half of 2021 and into next year, at 3.9 percent growth from the current fiscal year that ends in June.
But even with Lamont’s budget team expecting an unemployment rate of 3.9 percent in the summer of 2022, the forecast for Connecticut employment that summer still falls 12,400 jobs short of the pre-pandemic peak.
The Congressional Budget Office predicted this month that the U.S. economy will not recoup pre-pandemic job levels until 2024.
“We’ve been flat as a pancake in this state for many years — no more,” Lamont said Thursday afternoon, during an update on Connecticut’s efforts to contain coronavirus and his proposed budget. “But economic growth only matters if it [means] prosperity for all . ... We’re slowly digging our way out of this pandemic and getting people back to work.”
On Wednesday, Lamont for the second consecutive year proposed a tax rebate for companies that hire at least 25 people. His goal is to embolden mid-size businesses that might be positioned for a hiring push.
The question is how much of a head start Connecticut got in the 2020 holiday season. And as the COVID-19 vaccination distribution crawls toward the general working population, will it give many the confidence to resume their accustomed leisure activities that are a significant component of the Connecticut economy?
Indeed, the online job-search company based in Stamford, sees some promise in the first weeks of 2021 based on jobs postings to its websites as it entered February running slightly ahead of the levels of a year ago. New York City-region job postings were up 13 percent since September, however.
“For employment to recover completely, job postings will have to remain above the prepandemic baseline for an extended time,” wrote Indeed economist Jed Kolko, in an analysis posted in early February. “But job postings have improved significantly since the end of September in nearly all of the hardest-hit metros.”