Connecticut’s economy surged in the three months between July and the end of September, expanding by 3.9 percent, clocking in at a faster rate than the U.S. and New England economies and posting the eighth fastest pace among the 50 states, the U.S. Department of Commerce reported Wednesday.
The state is benefiting from strong national growth in addition to gains posted by finance and manufacturing, which are two primary industries in Connecticut.
Connecticut is unaccustomed to economic growth: The state’s economy shrank by 4.4 percent early in 2017 and posted zero growth for 2016.
Two economists said an uptick in economic activity is good news, but cautioned that one three-month period is not long enough to show that good times have returned to Connecticut.
“It’s not something to say, ‘We’re fantastic, celebrate, break out the champagne,’” said Peter Gioia, the Connecticut Business and Industry Association’s economist. “We’re not there yet.”
Because economic growth in Connecticut in previous three-month periods was anemic, he believes the economy will rise by just 1 percent this year.
Data showing a bleaker picture of Connecticut’s economy support skepticism of sustained accelerating growth. The state’s labor force is growing slowly, recovering only 76.4 percent of jobs lost in the Great Recession, weighed down by government at all levels reducing its work force due to falling revenue. In addition, Connecticut’s jobless rate — 4.6 percent in December — has been consistently above the national rate.
Connecticut also ranks high among homeowners with troubled mortgages, 11 years after the housing crash ushered in the recession. And for 2017, the median sale price of a single-family house in the 57-town area of greater Hartford slipped about a half percent.
Economist Don Klepper-Smith, a former adviser to ex-Gov. M. Jodi Rell, crunched the data and said cumulative year-to-date numbers — data measured differently than at the Department of Commerce — show that even accounting for growth, the economy contracted by more than 1 percent.
“The data objectively say we’re moving sideways,” he said.
The economy, measured as gross domestic product, or the sale and production of goods and services, expanded in every state and Washington, D.C., in the third quarter of 2017, the federal agency reported. Growth ranged from 5.7 percent in Delaware to 0.5 percent in South Dakota.
The size of Connecticut’s economy in the third quarter was $263.8 billion, the second largest in New England after Massachusetts, with an economy of $530.7 billion.
New England’s economy expanded in the third quarter by 3.8 percent. The U.S. economy grew by 3.4 percent.
In the region, New Hampshire registered the fastest growth, at 4.4 percent and in Maine, it was 3.2 percent. The economy expanded by 3.8 percent in Massachusetts, 3.5 percent in Rhode Island and 3.4 percent in Vermont.
Nationally, 17 of 21 industry groups increased in the third quarter, including two key sectors in Connecticut: finance and insurance and durable goods manufacturing.
Finance and insurance increased 14.7 percent nationally and contributed to growth in every state and Washington, D.C., the Department of Commerce said. It was the leading contributor to growth in seven of the 10 fastest growing states.
Durable goods manufacturing increased 7.5 percent nationally, posting the sixth consecutive quarter of growth. It increased in 49 states and Washington, D.C.
The state Department of Labor reported Monday that Connecticut employers added 6,000 jobs in December, bringing job growth for the year to a modest 7,700, up by a fraction of a percent.
Of that, manufacturing jobs were up 4,100, to 160,300 last year. The increase in manufacturing jobs, coming in at 2.5 percent was the first such rise in Connecticut since 2010.
“Connecticut’s economy is clearly benefiting from the tailwinds from the domestic economic recovery,” Klepper-Smith said.
