Hartford Business Journal

18 HARTFORDBUSINESS.COM | JANUARY 8, 2024 ECONOMIC SCORECARDS HOW MANY JOBS WILL CT LOSE IN 2024? 10,000 WHAT WILL CT'S UNEMPLOYMENT RATE BE AT THE END OF 2024? 3.5% WHAT'S YOUR 2024 ECONOMIC OUTLOOK FOR CONNECTICUT? Moderate Growth WHAT TYPE OF GDP DECLINE WILL CT SEE IN 2024? 1% WHICH INDUSTRY WILL ADD THE MOST JOBS? Health Care WHICH INDUSTRY WILL LOSE THE MOST JOBS? Financial Activities CT will add 10,000 jobs in 2024 — here's why Despite an extraordinary five-point surge in interest rates to combat inflation, the U.S. economy defied gravity in 2023, in turn adding lift to Connecticut's economy. U.S. inflation, which peaked at 9% in 2022, has dropped to within a point of the Fed's 2% target, without the dreaded surge in unemployment or slump in national output. For Connecticut, that meant jobs didn't shrink as feared; instead, they grew at twice the number that is typical of recent years of recovery or expansion. Connecticut added over 20,000 jobs during 2023, and saw unem- ployment ease to a near-record low 3.5%. Nonfarm jobs have returned to pre-pandemic levels, and private sector employment in the state is at an all-time high. So, what's in store for 2024? There's barely a whisper of reces- sion, though plenty of chatter exists that the Fed's tightening will eventu- ally bring the economy back down to Earth. Sure, that could translate into job losses for Connecticut, but the state's ongoing momentum and tight labor markets suggest job growth will continue. Expect the state to add around 10,000 jobs in the new year, a number more in line with long-run growth trends. The real challenge may be finding willing workers at a time when the state's labor force participation rate drifts ever lower. Tight labor conditions will hold unemployment in check at its current low rates. Health-related industries will continue to lead the state's growth sectors, and not just because the state's older demographic requires more medical services; Connecticut is also a leader in the booming health technology field. Unfortunately, there's little sign the secular decline in the state's flagship financial services sector will end, although a similar erosion in manu- facturing jobs has abated thanks to a recent resurgence in factory work and, importantly for Connecticut, federal defense contract dollars. steven P. Lanza Associate Professor in Residence; Author, "The Connecticut Green Sheet" University of ConneCtiCUt Growing CT's labor force key to 2024 economic outlook Connecticut's overall employ- ment reached pre-pandemic levels in 2023, with the unem- ployment rate (3.5% at the end of September) as low as it has been in over 30 years (the last time it was lower was in November 2001). The number of job openings remains high by historic standards. As long as the national economy continues to avoid recession (and a recession now seems very unlikely), Connecticut will continue to add jobs. The major constraint on growth is the available labor force. Fortu- nately, efforts are underway to remove barriers for those who have had difficulty engaging in work. In addition, the latest Census data is encouraging. While the media headlines (correctly) noted Connecticut had a net influx of approximately 57,000 residents in 2022, the numbers are even more encouraging from a labor force perspective. The more than 145,000 people who moved to Connecticut from other states were more likely to be of prime working age than the 88,000 individuals who moved out. In addition, nearly 27,000 people moved to Connecticut from other countries, and more than 70% of these immigrants were between the ages of 20 and 59. In the aftermath of the pandemic, Connecticut has added jobs and seen the unemployment rate fall, while the labor force has not recovered. The 2024 outlook assumes that efforts to grow the labor force — both by engaging Connecticut residents who are currently not working or looking for work, and attracting new residents — will be successful. There is evidence this is already starting to happen. Patrick FLaherty Director of Research and Information ConneCtiCUt Department of Labor HOW MANY JOBS WILL CT ADD IN 2024? 23,000 WHAT WILL CT'S UNEMPLOYMENT RATE BE AT THE END OF 2024? 3.6% WHAT'S YOUR 2024 ECONOMIC OUTLOOK FOR CONNECTICUT? Moderate Growth WHAT TYPE OF GDP GROWTH WILL CT SEE IN 2024? 2% WHICH INDUSTRY WILL ADD THE MOST JOBS? Health Care & Social Assistance WHICH INDUSTRY WILL LOSE THE MOST JOBS? Retail Trade

• Cover