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State Expected To Lose Jobs

UConn Economists Make Projections

By ERIC GERSHON, Courant Staff Wr

February 13, 2008

Connecticut will lose 7,000 jobs by late next year, undoing last year's celebrated return to its record employment level, economists at the University of Connecticut said in their latest forecast.

By the second half of 2009, a weakening national economy will drive state employment below 1.7 million total jobs — the record level briefly touched in 2000 and only reached again in June 2007 — according to the forecast being released today.

The decline would happen in 2009. Most of the job losses are expected in manufacturing, construction and municipal government.

The UConn team had earlier predicted job growth through 2009.

For 2008, the report calls for modest job growth of a few thousand jobs. But in 2009, the UConn economists now predict, Connecticut's economy will shed a greater number of jobs.

As of the end of December, the state had 1,702,600 jobs, according to the state labor department, a gain of about 16,000, or 1 percent, for all of 2007. The figure, however, is preliminary and is subject to revisions, which can be very large. In some recent years, the revisions, due in March, have radically changed the jobs picture.

Unemployment for the state stood at 5 percent in December, the same as the national rate, up slightly for the year.

The UConn report, by economists at the university's Connecticut Center for Economic Analysis, nevertheless says the state will narrowly avert recession by growing the total value of goods and services slightly, about 1.8 percent over two years. The economy is expected to grow in size to $182 billion in 2008 and $185 billion in 2009.

Despite marginal economic growth overall, weakness in certain sectors would account for the anticiapted job losses.

The UConn economists previously warned that job growth would slow, but this is the first time they forecast a retreat below 1.7 million.

Through 2009, the service sector is expected to generate the only significant employment growth, the report says.

Edward Deak, a Fairfield University economist who, like other economists, had anticipated job growth in Connecticut in 2008, now says the deterioration in the national economy is bound to hurt the state and would likely result in job declines.

He said "there's a possibility" that the state would end 2009 with fewer than 1.7 million jobs, as the UConn economists predict, and that jobs could start to erode this year.

Based on a mid-2006 national economic forecast that did not foresee a recession, Deak had predicted 2008 state job growth of about 10,000.

"Is Connecticut better off than the rest of the nation? For the most part, yes," he said. "But we can't escape what's happening at the national level."

Don Klepper-Smith of DataCore Partners, a New Haven economics and demographics consulting firm, says he'll stick with his prediction of modest state job growth in 2008, until there's greater evidence of a severe national recession.

Exports are strong, due to the weak dollar, he noted, and the state's aging population will call for ever more health care workers.

"I think it's premature to be looking at job losses," he said.