Connecticut lost 5,700 jobs in the second and third quarters of 2012, unemployment surged and the state budget is headed for a more than $1 billion deficit for next year.
In short, Connecticut’s economy overall remained wobbly in 2012, a new report from the University of Connecticut shows, and it appears it won’t be making much of a comeback anytime soon.
“The only breaks Connecticut’s economy seems to catch these days are bad ones,” the introduction to this quarter’s The Connecticut Economy states. “Unemployment surged even as potential workers appeared to leave the labor force in droves. Cracks began appearing in what had been a rock-solid state budget. And the jobs forecast for 2013 remains tepid at best.”
To make matters worse, the report later goes on to say, Congress seems deadlocked on solving the nation’s financial woes and could end up going over the so-called “fiscal cliff” by year’s end, a situation that would hurt Connecticut’s economy even more.
“The consequences for Connecticut employment would be disastrous” if Congress doesn’t avoid the fiscal cliff, the report says. “The state could lose as many as 20,000 jobs before growth returned in 2014, with losses peaking at 5,000 in 2013-Q2. And that’s not even counting the possible defense-related job cuts a sequestration might trigger.”
There are some bright spots in the report, however. If the federal government can avoid going over the fiscal cliff Connecticut could begin to see job gains of more than 3,000 or more per quarter next year and the decline of manufacturing in Connecticut appears to be at an end, the report states.