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22 HARTFORDBUSINESS.COM | JANUARY 13, 2025 ECONOMIC SCORECARDS Expect 'slow-to-no' CT job growth in 2025 T he Federal Reserve's two-year assault on rising prices has had its intended effect as the topline inflation number has dropped back to Earth, while the labor market has cooled considerably. Inflation has fallen from its high of 9% in 2022 to between 2% and 3% now, while over the same period, labor market job growth has slowed from a breakneck 300,000 monthly pace to a more leisurely 150,000 monthly gain, easing upward pres- sure on wages. For Connecticut, that has produced a similar slackening in labor market conditions. Annual job growth slowed from about 26,000 in 2023 to about 14,000 in 2024. Monthly job openings, though still higher than average, have fallen by more than 25% between the start of 2023 and the end of 2024. And the growth in private sector workers' average hourly earnings appears to have stabilized, albeit at a level above inflation, so real wages are still on the rise. So, how is 2025 shaping up? The Fed has begun easing its grip on the money supply, but is in no hurry to lower interest rates in the imme- diate future, according to Chairman Jerome Powell. Forecasters with both the Phila- delphia Fed and Wall Street Journal expect job growth nationally to slow further, which would translate into monthly job gains in Connecticut of fewer than 500. Given that Connecticut payrolls were flat in late 2024, the state would do well to add 5,000 jobs over the course of 2025. Yale New Haven Health's plan to convert the old Macy's store at the Meriden Mall into an outpatient center is a sign of the times: expect health care to be the big job-gainer, and retail trade the big job-loser. Despite slow-to-no job growth in 2025, the state's tight labor supply will keep the unemployment rate in Baby boomer retirements will impact CT's growth prospects C onnecticut's total employment has more than fully recovered from the COVID-19 lockdown, with private sector employment achieving all-time highs during 2024. Growth will continue in 2025, but will be a bit slower. Retirements seem to have picked up in 2024 and that trend is likely to continue as the youngest of the baby boomers (those born between approximately 1946 to 1964) approach retirement years. Retirements had an impact on manufacturing in 2024. While there is significant hiring by some large manufacturing employers, and there are successful training programs that create a new worker pipeline for this industry, there was little overall manu- facturing job growth as the job gains were offset by retirements. Experience is difficult to replace, and the data shows an increase in employment in manufacturing in younger age cohorts; these workers will gain experience over time. Connecticut's unemployment rate remains extremely low. Despite some highly publicized layoff announce- ments, the number of workers filing for unemployment benefits remains low. This suggests that workers are transi- tioning to new jobs relatively quickly. While the number of job openings in Connecticut has come down from historic highs, workers are still in demand as openings remain above pre-pandemic levels. Health care and social assistance is the state's largest industry and has added nearly 25,000 jobs over the past year. Demand for health care is projected to continue growing. The largest risks to the Connecticut economy come from national and international conditions. While steven P. Lanza Associate Professor in Residence of Economics; Editor, The Connecticut Green Sheet University of Connecticut PatriCk J. FLaherty Director of Research and Information Connecticut Department of Labor check, and productivity gains will enable real state GDP growth to outpace job growth and remain in positive territory. HOW MANY JOBS WILL CT ADD IN 2025? 10,000 HOW MANY JOBS WILL CT ADD IN 2025? 5,000 WHAT'S YOUR 2025 ECONOMIC OUTLOOK FOR CONNECTICUT? Moderate Growth WHAT'S YOUR 2025 ECONOMIC OUTLOOK FOR CONNECTICUT? Moderate Growth WHAT WILL CT'S UNEMPLOYMENT RATE BE AT THE END OF 2025? 3.6% WHAT WILL CT'S UNEMPLOYMENT RATE BE AT THE END OF 2025? 4% WHAT TYPE OF GDP GROWTH WILL CT SEE IN 2025? 3.1% WHAT TYPE OF GDP GROWTH WILL CT SEE IN 2025? 1% WHICH INDUSTRIES WILL ADD THE MOST JOBS? Health care and social assistance WHICH INDUSTRY WILL ADD THE MOST JOBS? Health care WHICH INDUSTRY WILL LOSE THE MOST JOBS? Retail trade WHICH INDUSTRY WILL LOSE THE MOST JOBS? Retail trade Connecticut's economy proved its resilience after the COVID-19 lock- down, the state will not be immune to a national economic contraction.