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August 31, 2020

Report: CT economy operating at 86% of pre-pandemic levels

HBJ Photo | Joe Cooper Downtown Hartford looked relatively deserted this spring due to orders keeping most workers home to limit the COVID-19 outbreak.
By Joe Cooper

Despite a statewide unemployment rate of 15%, Connecticut's ongoing economic rebound during the COVID-19 pandemic is pacing better than most other U.S. states, a new index shows.

A "Back-to-Normal Index" updated weekly by CNN Business and Moody's Analytics shows that Connecticut has recouped 86% of its pre-pandemic economic productivity, ranking No. 13 nationally.

Other New England states are also making better-than-average economic gains as pandemic-induced shutdowns have slammed the restaurant, hospitality and tourism industries, among others. 

The economy in Maine is operating at 95% of where it was in early March, followed by Rhode Island (89%), New Hampshire (88%), Vermont (87%) and Massachusetts (75%). The economies in New Jersey, Pennsylvania and New York are also operating at 81%, 80% and 72%, respectively, of where they were in early March, the index shows.

Although many economies in the Northeast are trending upward in recent months, the U.S. economy remains far from normal.

Based on the Back-to-Normal Index, the economy was operating at only 78% of pre-pandemic levels as of Aug. 19. Economic activity nationwide is down by almost one-fourth from its pre-pandemic level, which is far from normal.

As bad as that is, it is substantially better than the darkest days of the pandemic in mid-April, when the nation was unsure how contagious or virulent the virus was. Nonessential businesses in much of the country were shut down, and most people were sheltering in place. The Back-to-Normal index was low as just 59% on April 17.

The economy rallied between mid-April and mid-June as businesses reopened, but it is clear they opened too quickly and reignited the virus. The economy has gone more-or-less sideways ever since. 

Some states had to backtrack on reopenings, and businesses and households everywhere have turned more skittish. The chart below shows how the Back-to-Normal Index stalled this summer, around the same time that coronavirus cases were surging.

In recent weeks, the state Department of Labor (DOL) said Connecticut gained 26,500 net jobs in July for a total of 1,540,400 seasonally adjusted jobs. Compared to July 2019, nonagricultural employment is down sharply by 146,00, or 8.7%, seasonally adjusted jobs.

The state in June added a historic 73,700 jobs, DOL said.

A CNN Business report contributed to this story

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