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CT Economic Outlook 2008:Q1 to 2012:Q4

CT Economic Outlook 2008:Q1 to 2012:Q4. Edward J. Deak, Ph.D. CT Model Manager, NEEP Professor of Economics Fairfield University Federal Reserve Bank of Boston, May 30, 2008. CT Economy in Decline March/April 2008 Status. Jobs: Peak 12/07,  Jan-Apr 08 = -7.2k

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CT Economic Outlook 2008:Q1 to 2012:Q4

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  1. CT Economic Outlook2008:Q1 to 2012:Q4 Edward J. Deak, Ph.D. CT Model Manager, NEEP Professor of Economics Fairfield University Federal Reserve Bank of Boston, May 30, 2008

  2. CT Economy in DeclineMarch/April 2008 Status • Jobs: Peak 12/07, Jan-Apr 08 = -7.2k • Cuts: Trade, Bus Services, Mfg, Financial • Adds: Educ + Health, Gov, Leisure+Hospit • UE Rate %: 4.4=1-6/07, Apr 08=4.7 US=5.0 • State + Local Budgets: State deficit -$67m • Local $ cuts + layoffs, State deficit ’09? • Casino Revenues:Both 10%+ for slot $ • New UE Claims:7.6% from 4/07

  3. CT Housing Market In Recession • Permits: 07=16.1% =7,746, 08Q1=15% • Peak: 05=11,885, 07 lowest # since 1991 • Sales Existing: 07=12%, 08Q1=30% • Peak: 05=58.1k, 07=45.6k lowest since ‘96 • Prices:07=2% to $320.6k, C-S 4qtrs ‘07 • 08Q1=6% at $279,900, DOM=139 6% • Foreclosure Filings: 08Q1=7,632 +303% • Subprime Del: 08Q1=27.1%, US=26.8%

  4. Quadruple Economic Whammy for CT • Housing: prices + building recession + Tighter credit +Financial market freeze • Financial Sector:Bonus Income, # of job cuts, Wall St affects Main St • CT Energy Costs: Elec, gasoline, HHO $10,800 per yr per 4 person household. • Food Prices

  5. Annual Job Change %:CT vs. U.S 2006-2012

  6. Specific CT Job Changes • Job Additions: 27 firms at 4,301 jobs • Foxwoods Casino +2,300 in 08Q2=MGM • Mohegan Sun Casino +2,000 to 2010 • Royal Bank of Scotland +1,000 late 09Q2 • Yale-New Haven Hospital +400 08Q4 • Blue Sky +300 08Q4 • Job Cuts: 23 firms 1,728 jobs • Stevenson Lumber -400 08Q2 • Clairol -235 2010:Q1 • LifeTouch -225 08Q2 • Federal Reserve check clearing -146 09Q1

  7. Job Changes Publicly StatedSeptember 2007-April 2008

  8. % Change CT Jobs: by Employment Sector 2007 2008 2009 2010 2011 2012 • Mfg -1.1 -1.5 -0.5 0.4 -0.3 -1.1 • Const 2.0 -4.0 -6.5 -8.2 -4.2 1.7 • Trade 0.2 -0.4 -0.6 0.4 0.3 -0.3 • Leis/Hosp 2.3 1.5 -1.9 3.0 0.3 1.1 • Ed/Hlth 2.8 1.9 2.1 2.9 2.5 1.8 • Fin Serv 0.1 -5.1 -1.9 1.2 0.9 0.5 • Bus serv 4.5 -1.6 -0.3 1.4 0.4 -0.2 • Govt 1.3 1.0 1.3 0.7 0.0 0.3

  9. % Change in GDP:CT vs. U.S. 2005-2012

  10. %  Real Personal Income CT vs. U.S. 2005-2012

  11. CT v. U.S Home Permits:% Change 2002-2012

  12. CT v. US Sales Existing Homes:% Change 2002-2012

  13. CT v. U.S. Median Sale Price:% Change 2002-2012

  14. CT Nom Per Income v. Median Sale Price: %  1981-2012

  15. Who in CT is being Crunched by the Credit Crunch? • Housing: Home owners, buyers, contractors • Job Sectors: Fin serv, const, retail • State Budget: Surplus to Deficit • Local Budgets: $ cuts + Layoffs • Private Charities: Food Banks, Social Service • College Students: w/priv funding sources • Gaming: Foxwoods + Mohegan Sun Casinos

  16. Summary + Observations • CT Economy in Cyclical Decline: • Job peak just above previous peak: 12/07 vs. 7/00 • Recovery Traction? Another “jobless recovery”? • Recession concerns: • Housing recession, credit freeze, financial losses • Higher energy + food costs, war costs, election? • CT Challenges: • Aging population (Boomers) + Youth Out-migration • Affordable housing +Transportation + Cities • Gaps: Worker skills + training, income distribution • High bus costs: Energy, labor, taxes, office space

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