Even as Connecticut’s overall economic outlook is clouded with uncertainty, the New Haven-area economy is showing a resiliency that is dumbfounding to economist Donald Klepper-Smith.
The latest edition of the New Haven Register’s Economic Scorecard shows five economic indicators headed in a positive direction and three that are negative. But it is numbers not found in the current Scorecard that Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners and author of the Scorecard, said really are indicative of the region’s underlying economic strength.
Klepper-Smith said the New Haven area has recovered 139 percent of the jobs that were lost during the during the 2008 recession. By comparison, the Connecticut economy as a whole has recovered just 81 percent of the jobs lost during the last recession, making it the worst state in New England in terms of employment recovery, he said.
To break that down even further, the New Haven area lost 17,700 jobs in the last recession, Klepper-Smith said. Since then, the region has added 17,700 jobs and gained an additional 7,000 jobs, he said.
The key reason for the continued strength of the New Haven area, according to Klepper-Smith, is driven by two employment categories.
“The New Haven area has an education- and health care-driven economy,” he said. “You’re creating good jobs in the areas that it counts.”
The region added 4,500 jobs in health care, education and construction last month compared to February 2018.
To some, the so-called “eds-and-meds economy” seems virtually recession-proof. Enzennio Mallozzi, managing director for the Colliers International’s Stamford office, said one reason is that no matter what the economic conditions are, “there is always a need to serve the aging populations.”
“And when the economy turns downward, people are looking for ways to separate themselves from the pack,” Mallozzi said. “Going back to school and getting another degree is a way to do that.”
Although Klepper-Smith’s assessment of the New Haven-area economy largely is positive, he said one of the negatives in the latest edition of the Scorecard bears watching: The 8.5 percent decline in consumer confidence compared to January 2018.
“We could be starting to see peaking in consumer confidence,” he said. “The question is whether what we saw in January is a temporary blip or something that is part of a trend.”
Real disposable income and median single-family home price also were headed in a negative direction. Of the two indicators, the decline in median home price was the more dramatic, falling 7.4 percent or $15,750 from where it was in January 2018 to $196,500 during the same period this year.