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Recovery to continue say economists
August 29, 1997
All three editors of a UConn-produced economics newsletter Monday predicted that the state's economic resurgence should continue at least through next summer.
Citing a handful of factors already at work in the state's current economic recovery, now in its fifth year, and, more importantly, several factors that have yet to occur, Will McEachern, Dennis Heffley, and Edwin Caldwell all predicted that the present, "unexciting recovery" would continue, probably until the 1998 elections.
"We've had this unexciting recovery without any input from the housing sector, which is really odd," said McEachern, an economics professor and editor-in-chief of The Connecticut Economy, a University of Connecticut Quarterly Review, speaking before the magazine's sustaining partners and media representatives during a luncheon briefing.
"Also, the Hartford region, which is really an important engine in this state's economy, has been missing from the recovery. So, when that kicks in, and the housing market finally catches up with the rest of the state, I think the recovery will gain some tenure," he said.
Heffley, also an economics professor, and Caldwell, an economic consultant and former chief economist for Connecticut Bank &Trust, agreed with McEachern. But, cautioned Caldwell, people should not hope the economy becomes too exciting, because the problems that would be caused by too hot an economy would not be worth the downside - another recession.
Donald Ferree, associate director of the Roper Center and director of the Consumer Confidence Survey, a regular feature in the magazine, also espoused caution, saying the latest survey found consumer confidence in Connecticut at an all-time high, more than 10-12 times the level it was when he began the survey in 1992.
"These perceptions of the economy, while good, are also much higher than they should be," based on current economic conditions, he said.
Ferree said he believes much of the confidence measure is being driven by the stock market, and subsequent media coverage of each new record.
Nonetheless, McEachern painted a rosy picture of the current state of the economy. In fact, he said, other than the soft housing starts, there was little reason to be anything but optimistic.
So far this year, he said, the state had added 26,500 jobs compared to the same quarter last year, pushing the total number of jobs added during the recovery to about 85,000, nearly 60 percent of the 156,000 jobs lost during the recession in the late 1980s and early 1990s.
Help wanted advertisements are up, the number of people filing for unemployment is down, and a range of tax collections, from sales to income to real estate, have increased, an indication that people are spending money. And, of Connecticut's 169 towns, only one - Union - has a higher unemployment rate halfway through 1997 than at the same period in 1992.