UConn Economists Latest To Predict Sizable Job Losses
November 12, 2008
UConn economists are joining the ranks of forecasters projecting massive job losses as Connecticut finally starts to fall into the clutches of a national recession.The Connecticut Center of Economic Analysis at UConn will release a forecast today that predicts the loss of 40,000 jobs in the next two years. The prediction is modest compared with others, but it stands in stark contrast to the center's August forecast that predicted a loss of 9,500 jobs.
Connecticut has remained relatively untouched by the recession when it comes to job losses, but economists are now agreeing that its mainstay industries can't hold up much longer.
In the past few weeks, The Hartford announced that it is laying off 500 employees, 125 in Connecticut, and several industrial companies, including Barnes Group Inc. and Gerber Scientific, have had moderate layoffs.
The big change since August is in the national picture, which has deteriorated amid fallout in the financial services sector.
"Recent economic events have been far from encouraging," said Peter E. Gunther, the senior research fellow who wrote UConn's economic outlook.
"The old data made things look a little rose-colored," he said, referring to the center's August forecast. "Now we're going back to being pessimistic."
Other economists would argue that UConn's forecast is still too rosy.
Don Klepper-Smith, chairman of the governor's economic advisory panel, has said the state is more likely to lose 60,000 to 80,000 jobs by mid-2010.
"It stands to get worse before it stands to get better," said Klepper-Smith, who predicts that Connecticut will begin recovering from the recession halfway into 2010.
The number of jobs in Connecticut has remained essentially flat so far this year, outperforming the nation's economy with a healthy mix of industries, including aerospace, defense, health care and insurance. But recent layoffs have shown that even these markets aren't recession-proof.
Massive reductions in international spending are expected to have a substantial impact on Connecticut's economy, particularly in the aerospace sector, said Peter M. Gioia, economist for the Connecticut Business and Industry Association.
And even Connecticut, which has the highest percentage of residents above the nation's median income in the country, is set to see consumer spending fall.
"Consumers are basically going to stop consuming anything but the essentials," he said, "and that's going to reverberate across all sectors."
Reprinted with permission of the Hartford Courant.
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