The amount of money that people in Connecticut earned from their jobs and investments, and receive in government benefits such as Social Security, rose rapidly in the first half of this year, a new report shows — but after adjusting for inflation, total state income still has not returned to where it was in 2007.
Dan Kennedy, senior economist at the state Department of Labor, said improvement will be slower over the next eight months in an article published Thursday in the Connecticut Economic Digest.
Even after stripping out government payments — since unemployment checks contribute to income, but not indicative of the state's economic health — things were turning around in the first half of 2011.
If the state's residents continued to gain income at the rate they were then, there would have been be a 9.2 percent income growth rate for 2011. That would make personal income, including government support, $206.4 billion for the entire year.
One-third of the growth was from investment income, which grew faster than the total of wages earned by state residents, though wages and salaries grew strongly, too.
Connecticut residents recovered more strongly than the country as a whole, statistics show.
Kennedy predicts that personal income growth — stripping out the government checks — will be only 1.8 percent the second half of the year. He said it could be a little better if shoppers spend more during the Christmas season.
"It may be that the fourth quarter will be stronger than first expected, not great, but stronger than first expected," he said. He projects the first half of next year will be better than the back half this year, but still much more sluggish than the first half of 2011.
Reprinted with permission of the Hartford Courant.
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