Connecticut’s Job Growth Stagnant, FDIC Says

By John Christoffersen Associated Press

STAMFORD — Connecticut has the worst job stagnation in the country, with employment only slightly higher now than at the beginning of the 1990s, a federal agency says.

The state has lost more than 100,000 manufacturing jobs in the last 15 years and had the lowest growth in its professional and business services sector in New England, according to a report by the Federal Deposit Insurance Corp, which protects bank deposits.

“This lack of growth during a national economic upswing is a concern as employment now is only slightly higher than at the beginning of the 1990s,” the FDIC wrote in the report released Tuesday. “No other state in the country has had such stagnation in employment.”

FDIC officials said in a conference call that Connecticut’s lack of job growth stems from the state’s slow population growth and the steady loss of manufacturing jobs.

Connecticut’s job growth increased 1.4 percent in the first three months of this year from a year ago. That puts the state at 32nd in the country and below the national average of 1.7 percent, FDIC officials said. The state’s total job base of 1.664 million this year is up only 19,000 jobs from 1.645 million in 1990, officials said.

John Tirinzonie, state labor economist, said Connecticut has gained back about 31,000 jobs since September 2003. The state is still down about 30,000 jobs from its peak employment of 1.7 million in July 2000, he said. Last year, he said, there was a gain in manufacturing jobs.

“I wouldn’t call it stagnation,” Tirinzonie said. “We’re not creating jobs as fast as we’d like to.”

Connecticut’s unemployment rate was below the national average until May, when it increased to 5.3 percent, Tirinzonie said. That was above the national rate of 5.1 percent.

Connecticut’s economy has traditionally been powered by the insurance industry, financial services, the military and, more recently, the world’s largest Indian gambling casinos. But some experts don’t see a new engine revving up these days and have blamed the state’s high costs and growing traffic congestion for the weak job performance.

Connecticut still has the highest personal income per capita in the country. Last year, the state’s growth in personal income was 16th fastest in the country, up from the third slowest in 2003, according to the FDIC.

Fairfield County had the highest personal income per capita of all metropolitan areas in the country.

Housing prices rose 57 percent during the past five years in Connecticut, while housing permits jumped 16 percent last year to a six-year high, according to the report.

The increase in supply likely will constrain house price increases, FDIC says. A rise in interest rates poses another challenge.

A recent FDIC study identified 55 booming housing markets nationwide, including the Norwich-New London area. But FDIC officials said predicting a housing bubble is difficult and noted historically that home prices do not fall rapidly after a boom because homeowners are reluctant to sell at distressed prices.

A severe development could trigger a decline in house prices, experts said. FDIC officials noted that the Pentagon’s proposed shutdown of the Naval Submarine Base New London in Groton could affect 15,000 jobs.