Will the good news last? New Haven-area econ­omy does bet­ter than ex­pected in Novem­ber, but some fear down­turn could come

New Haven Register (Sunday) (New Haven, CT) - - BUSINESS - By Luther Turmelle [email protected]­medi­act.com

The Novem­ber edi­tion of the New Haven Regis­ter Eco­nomic Score­card would seem to in­di­cate the re­gion’s econ­omy con­tin­ues to chug along at a slow but steady pace.

Five of the eight in­di­ca­tors that make up the score­card — to­tal em­ploy­ment, la­bor force, the re­gion’s un­em­ploy­ment rate, con­sumer price in­dex and me­dian sin­gle-fam­ily home price — were headed in a pos­i­tive di­rec­tion. Two of the three re­main­ing in­di­ca­tors — hous­ing per­mits and real dis­pos­able in­come — were headed in a neg­a­tive di­rec­tion while con­sumer con­fi­dence was stuck in neu­tral.

“The good news is that in the cru­cial ar­eas, the num­bers were stronger than ex­pected,” said Don­ald Klep­per-Smith, chief econ­o­mist and di­rec­tor of re­search for New Haven-based DataCore Part­ners and au­thor of the score­card.

But Klep­per-Smith said he is con­cerned the re­gion and the state could be headed for a fall eco­nom­i­cally.

“My sense is that this could be the last big hur­rah for a while,” he said. “I ex­pect fur­ther weak­ness from here on out be­cause the cur­rent eco­nomic ex­pan­sion is get­ting a lit­tle long in the tooth.”

For starters, Klep­per-Smith said, if the eco­nomic re­cov­ery con­tin­ues through the end of June, it will be­come the long­est one on record. That has height­ened ex­pec­ta­tions among Con­necti­cut con­sumers that the state and the New Haven area may be headed for a re­ces­sion.

“Fall­ing sales paired with the ris­ing sin­gle-fam­ily home price con­tin­ues to high­light the unique re­la­tion­ship be­tween sup­ply and de­mand in Con­necti­cut real es­tate,” said Cas­sidy Mur­phy, as­so­ciate pub­lisher and me­dia re­la­tions di­rec­tor of The War­ren Group, a Mas­sachusetts real es­tate trade pub­li­ca­tion.

So while the $4,700 in­crease in the me­dian sin­gle-fam­ily home sale price in the New Haven area might nor­mally prompt “peo­ple to tap into their home eq­uity,” Klep­per-Smith said there is ev­i­dence that isn’t hap­pen­ing as ex­pected.

“Spend­ing power has been tem­pered,” he said. “”Peo­ple are less likely to spend when they are un­cer­tain.”

Among the pos­i­tives in the Novem­ber score­card was the con­sumer price in­dex.

The in­dex is a weighted av­er­age of prices of a bas­ket of con­sumer goods and ser­vices, such as trans­porta­tion, food and med­i­cal care. It is cal­cu­lated by tak­ing price changes for each item and av­er­ag­ing them.

While the in­dex rose 2.18 per­cent in Novem­ber, Klep­per-Smith said “any­thing un­der a 3 per­cent in­crease means we’re do­ing OK .”

“Food prices and en­ergy prices have been kept mod­er­ate,” he said. “Gaso­line prices are a func­tion of sup­ply and de­mand. And the U.S. is pro­duc­ing more oil, so we are less re­liant on the Mid­dle East.”

Em­ploy­ment re­lated in­di­ca­tors dom­i­nated the pos­i­tives in the eco­nomic score­card.

To­tal em­ploy­ment in the New Haven La­bor Mar­ket Area was up 1.3 per­cent in Novem­ber while the size of the la­bor force in­creased by one per­cent. The la­bor force rep­re­sents the num­ber of peo­ple who are em­ployed plus the num­ber of peo­ple ac­tively look­ing for work.

The un­em­ploy­ment rate for Novem­ber for the New Haven area was down 1.1 per­cent from the same pe­riod a year ear­lier.

“My sense is that this could be the last big hur­rah for a while.”

— Don­ald Klep­per-Smith, chief econ­o­mist and di­rec­tor of re­search,

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