1. An Update on the Connecticut Economy Dr. Steven P. Lanza Executive Editor, The Connecticut Economy CREUES Commercial Real Estate Conference November 9, 2010

4. IS THE US ECONOMY WALLOWING IN RECESSION…. Current Recession Pre-1973 Recessions 1973 & Later Recessions Indexed GDP Peak = 100

5. …OR SIMPLY FACING AN UNEXCEPTIONAL REBOUND FOLLOWING AN EXTRAORDINARY DECLINE? Current Recession Pre-1973 Recessions 1973 & Later Recessions Indexed GDP Trough = 100

6. THIS “BIG CHILL” HAD A PREQUEL Quarters of Recovery Current Recession 2001 Recession GDP % Growth

7. RECESSION LEAVES A YAWNING OUTPUT GAP Average: 6.3% Trillions $2005

8. BUT LITTLE APPETITE FOR MORE STIMULUS Growth in Federal Deficit

9. CONSUMERS ARE UNLEASING SPENDING AS THEY REIN IN DEBT 2.4%/YR 3.9%/YR Retail Sales Debt Service as Percent of Income

10. HOUSING COULD SURPRISE TO THE UPSIDE + 2 Million -2.2 Million Housing Starts in Thousands, SAAR Average: 1959-2000

11. BUSINESSES MAY HAVE LITTLE CHOICE BUT TO HIRE +1.3%/YR +6.1%/YR -1.8%/YR in Q2 Worker Output per Hour +1.9%/YR in Q3

12. HARTFORD WEATHERS STORM COMPARATIVELY WELL U.S. Hartford Stamford Connecticut Nonfarm Jobs: Peak =100

13. FINANCE STILL SHAKY Hartford U.S. Stamford Connecticut Finance Jobs: Peak =100

14. MANUFACTURING ON SLIGHTLY FIRMER GROUND Hartford U.S. Stamford Connecticut

15. 3% GDP 2% GDP STILL, A MURKY OUTLOOK FOR CONNECTICUT JOBS Thousands Scenario Trough/11 Growth 2% GDP 300 3% GDP 12,500 4% GDP 24,700 4% GDP

16. +27,000/YR +1,000/YR

17. CT Ranks #10 in self employment in 2008 2:7 Ratio for CT 1:4 Ratio for US +4.7%/YR

18. 1:5 Ratio CT 1:6 Ratio US

19. 1:2 3:8 Litchfield + Fairfield Cos. State Population30% State Self-employed40%

20. CONNECTICUT HAS HIGH MANUFACTURING WAGES AND SALARIES Hourly Wage of Production Workers

27. 1990s: self-employment jobs stabilized but earnings closed gap 2000s: self-employment jobs surged but earnings plateaued