Hartford Business Journal

38 Hartford Business Journal • December 22, 2014 www.HartfordBusiness.com Industry Focus E c o n o m i c F o r E c a s t ExpERts coRnER 2015 to lift Connecticut, U.S. economies By Mark Vitner F ive and a half years have now passed since the U.S. economy first emerged from its worst recession in the post-war era. Eco- nomic growth has aver- aged a solid yet unspec- tacular 2.2 percent during this period, a pace that has proved sufficient to allow the unemployment rate to drop back below 6 percent and pull capacity utilization back up near its long-run average of around 79 percent. The modest pace of economic growth has provided a false impression that the recovery is still in its infancy, even though the current economic expansion is already slight- ly longer than the average for the postwar period. Indeed, many recent public opinion polls have shown that slightly more consumers believe the economy is still in recession than believe condi- tions are recovering. And a whopping 78 percent of voters in November's midterm election noted they were either concerned or somewhat con- cerned about the economy. The combination of years of unusually slow economic growth, particularly following such a deep recession, and sluggish income growth likely explain a great deal about consumers' frustration with the pace and composition of economic gains. Not only has economic growth been slower than in recent recoveries but the gains appear to have been more uneven, which has given rise to a new sense of urgency for monetary and fiscal policies to address grow- ing issues surrounding income inequality. Years of modest growth and extremely accommodative monetary policy have also reduced volatility in the financial markets and possibly provided a false sense of comfort that there are fewer imbalances currently present in the economy and that the recovery has plenty of room to run. While we see the pace of economic growth picking up over the next couple of years as more sectors come back online, the risks have also increased. The energy and technology sectors, two of the workhorses through the first five and a half years of the recovery, are begin- ning to show their age. Other areas will need to step up if overall growth is going to accelerate. Stronger job and income growth has put the consumer in a much better position. Wage and salary growth accelerated this past year, ris- ing 5.1 percent. That was strong enough to keep consumer spending growing at a solid pace, even though expanded emergency benefit payments were reduced at the start of the year. Improving job and income growth and lower gasoline prices should keep spending on pace in 2015. Consumer confidence has revived smartly in recent months, suggesting that consumers feel better about their finances. Confidence is currently at its high- est level since the recession ended and most Mark Vitner Banking&Finance Many local companies are happy they did. That's because they recognized the benefits of working with an established company for every phase of construction, including design/build expertise. As your local Butler Builder ® , we offer a full-range of systems construction capabilities that combine efficiency, functionality, and virtually endless design possibilities. Give us a call today, and put us to work on your project. Contact us at 1-855-BUILD-86 or visit us on the web. experience. Build on our ©2011 BlueScope Buildings North America, Inc. All rights reserved. Butler Manufacturing™ is a division of BlueScope Buildings North America, Inc. www.borghesibuilding.com 2155 East Main Street • Torrington, Connecticut 06790

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