1 The Economic Outlook for Connecticut Rae D. Rosen Senior Economist and Assistant Vice - President...

1

The Economic Outlook for Connecticut

Rae D. RosenSenior Economist and Assistant Vice - President

Federal Reserve Bank of New YorkSeptember 9, 2004

1

2

Key Points:

• Connecticut’s economy appears to be turning.

• The recovery has been slower than expected.

• Modest job growth (less than one percent) is

projected for 2005.

1

3

Second District Unemployment Rates

July 2003 July 2004

United States 6.2% 5.5%

Massachusetts 5.8% 5.3%

New York City 8.4% 7.5%Connecticut 5.7% 4.6%

Hartford 6.1% 5.1%

Stamford 3.7% 2.9%

Source: Bureau of Labor Statistics.

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4

New York

ConnecticutNew Jersey

Massachusetts

CT to NJ 3,000NJ to CT 3,200

Workers That Commute fromOutside Area of Residence

Source: U.S. Census Bureau, 2000 Census of Population.C

T t

o M

A

14,0

00M

A t

o C

T

27,0

00

NJ

to N

Y

335,

000

NY

to

NJ

126

,000

CT to NY 6

0,000

NY to CT 4

1,000

MA to NY 5,000NY to MA 6,000

17

5

Recent Trends in Regional EmploymentPercent change from 12 months earlier

-7

-5

-3

-1

1

3

5

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

-7

-5

-3

-1

1

3

5

Percent Percent

United States

Source: Bureau of Labor Statistics, FRBNY calculations.

United States Jul. '04 1.3%Connecticut Jul. '04 0.0%

Connecticut

18

6


-7

-5

-3

-1

1

3

5

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

-7

-5

-3

-1

1

3

5

Percent Percent

United States


United States Jul. '04 1.3%Connecticut Jul. '04 0.0%Hartford Jul. '04 -1.4%

Connecticut

Hartford

19

7


-7

-5

-3

-1

1

3

5

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

-7

-5

-3

-1

1

3

5

Percent Percent

United States


United States Jul. '04 1.3%Connecticut Jul. '04 0.0%Hartford Jul. '04 -1.4%Stamford Jul. '04 0.0%

Connecticut

Stamford

Hartford

20

8

2,500

4,000

5,500

7,000

8,500

9/7/01 2/7/02 7/10/02 12/10/02 5/12/03 10/12/03 3/13/04 8/13/04

2,500

4,000

5,500

7,000

8,500sadj. 4 - week

CT Initial Claims for Unemployment Insurance Seasonally Adjusted

Claims

Source: Connecticut Department of Labor.

Claims

9

9

Personal IncomePercent change from 4 quarters earlier

-3

-1

1

3

5

7

9

11

13

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

-3

-1

1

3

5

7

9

11

13

Percent

United States

New York

United States 2004 Q1 5.2%New York 2004 Q1 5.5%Connecticut 2004 Q1 3.8%Percent


Connecticut

12

10

Consumer Price IndexPercent change from 12 months earlier

-5

-3

-1

1

3

5

7

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

-5

-3

-1

1

3

5

7

Percent Percent


United States

United States - Services

U.S. Jul. '04 3.0%U.S. - Durable Goods Jul. '04 -2.8%U.S. - Services Jul. '04 3.0%NY/NE Jul. '04 3.9%

United States - Durable Goods

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Growth in Service Jobs% change July 2004 / July 2003

U.S. Connecticut Stamford Hartford

Professional & Business 3.4 -1.0 -0.7 1.6

Security/Commodity Broker 4.1 3.4 N/A N/A

Leisure and Hospitality 1.5 3.5 3.9 2.5

Arts, Entertainment and Recreation -1.0 6.0 N/A N/A

Accomodation And Food 2.0 2.7 -1.8 3.7 Eating and Drinking 2.4 3.4 N/A 1.9 Accommodations 0.0 -2.3 N/A N/A

Health and Social 2.2 0.6 3.1 0.8Educational 2.2 1.4 N/A N/A

All Services 1.3 0.2 0.4 -0.6Services as % of Total Employment 83.0 84.0 91.7 84.5

Source: Bureau of Labor Statistics, FRBNY Calculations.

Note: U.S. data are for August 2004. 21

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Growth in Service Jobs% change from July 2004 to July 2003

US Connecticut Stamford NYCProfessional & Business 3.4 -1.0 -0.7 3.0

Security/Commodity Broker 4.1 3.4 n/a 0.1Accommodation 0 -2.3 n/a 7.8Eating and Drinking 2.4 3.4 n/a 3.7Motion Pictures 4.1 n/a n/a 13.8Architecture & Engineering 3.8 1.6 n/a 1.4Health and Social 2.2 0.6 3.1 1.7Educational 2.2 1.4 n/a -0.1Amusement -0.6 5.7 n/a 3.1Legal 1.2 1.3 n/a 2.8Total Services 1.3 0.2 0.4 1.4Services as % of Total Employment 83.0 84.0 91.7 93.6

Source: Bureau of Labor Statistics, Connecticut Department of Labor, FRBNY Calculations.

*Data for Eating & Drinking and Accommodation are combined at a higher NAICS level and reported as Accommodation. Note: U.S. date are for August 2004. 22

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15

Office Vacancy RatesQuarterly

0

5

10

15

20

25

30

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

0

5

10

15

20

25

30

Percent Percent

Source: Coldwell Banker.

United States-Metropolitan

Metropolitan Stamford

Note: Q2 2004 Overall Office Vacancy rate for Hartford was 18.2%. Source: Cushman and Wakefield.

Metropolitan NYC

Hartford

25

16

Home PricesPercent change from 4 quarters earlier

-6

-4

-2

0

2

4

6

8

10

12

14

16

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

-6

-4

-2

0

2

4

6

8

10

12

14

16

Percent Percent

Source: Office of Federal Housing Enterprise Oversight.

United States

New York

United States 2004 Q2 9.4%New York 2004 Q2 11.0%Connecticut 2004 Q2 10.7%

Connecticut

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Connecticut Net Migration

-20,000

-18,000

-16,000

-14,000

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

1995 1996 1997 1998 1999 2000 2001 2002 2003-20,000

-18,000

-16,000

-14,000

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

Returns Returns

Source: Internal Revenue Service, Statistics of Income.

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Connecticut Migration

60,000

70,000

80,000

90,000

1995 1996 1997 1998 1999 2000 2001 2002 200360,000

70,000

80,000

90,000

Returns Returns

Connecticut In

Connecticut Out

Source: Internal Revenue Service, Statistics of Income.11 14

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Net Domestic and International MigrationApril 1990 to July 1999

Net Domestic Migration

Net International Migration

Connecticut -226,370 73,389

New York -1,888,936 1,107,814

New Jersey -378,495 377,830

Source: U.S. Bureau of the Census.

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Net Domestic and International MigrationApril 2000 to July 2003

Net Domestic Migration

Net International Migration

Connecticut -9,220 50,574

New York -551,672 442,800

New Jersey -92,699 192,044

Source: U.S. Bureau of the Census.

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65 and over

55 to 64

45 to 5435 to 44

16 to 24

25 to 34

0

10,000

20,000

30,000

40,000

0

10,000

20,000

30,000

40,000

US Workforce by Age2003 and 2012


Age of Workers4

22

-10

0

10

20

30

40

50

Age of Workers

16 - 2416 - 24 25 - 34

35 - 44

45 - 54

55 - 64 65 and older

Growth in US Workforce by AgePercent Change from 2003 - 2012


Percent

2

23

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

Age of Workers

16 - 24

25 - 34

35 - 44

45 - 5455 - 64

65 and older

Growth in US Workforce by AgeChange in Number of Workers from 2003 - 2012

Source: Bureau of Labor Statistics.5

1 The Economic Outlook for Connecticut Rae D. Rosen Senior Economist and Assistant Vice - President...

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