New England’s six states came together at last week’s New England Economic Partnership (NEEP) Fall Conference, each represented by one NEEP member, to provide an overview of the economic conditions throughout the region. They were joined by economist Mark Zandi of Moody’s Analytics and keynote speaker Stephanie Pollack, secretary and CEO of the Massachusetts Department of Transportation.

As a backdrop to the discussion, Zandi provided a summary of the nation’s economic state as it continues to emerge from beneath the mire of recession, describing the economy as “performing reasonably well.”

Zandi presented four specific data points to highlight key growth areas in the U.S. economy: employment, wage growth, housing supply and America’s driving role in global economics.

• Although job growth has slowed slightly in recent months, Zandi said, underlying job creation is around 200,000 per month – the best the country’s seen since the late 1990s. If the trend continues, he said, the country will reach full employment (that is, a typical level for a healthy economy) by next summer.
• Despite climbing at a pedestrian pace throughout the recovery, Zandi said he expects a strong pickup in wage levels in the coming year as unemployment drops and the labor market becomes more competitive.
• As unemployment drops and wages rise, Zandi noted, the U.S. will see a boom in new household formation, which will reverse the nation’s housing market from being overbuilt to undersupplied. This will lead to new construction, and thus more new jobs.
• Amidst an economic storm occurring overseas, Zandi said, the U.S. now shines as “arguably the strongest big economy on the planet,” rivaled only by the likes of India. He said that the U.S. will weather the storm, contributing more to global GDP growth than any other nation or region.

In keeping with the strong job growth around the U.S., Connecticut has seen a “rather extraordinary” increase in jobs over the past year, as described by Edward J. Deak, professor emeritus of economics at Fairfield University and NEEP representative for Connecticut.

From mid-August 2014 to mid-August 2015, Connecticut added 33,200 jobs and is now at about 90 percent of pre-recession employment. Deak said this is expected to continue at about 19,600 per year on average through 2018. However, he noted several risks regarding job cuts by major corporations within the state – possible GE Capital relocations, for instance, that could cost 4,000 or more jobs, or a Sikorsky merger with Lockheed Martin, which Deak called “stable,” but which could still put up to 7,500 jobs in question.

Construction in Connecticut remains slow, Deak noted, despite more than $130 million going toward college dorm building.

Commercial real estate is particularly lacking, now 20 percent vacant throughout the state. Deak attributed this largely to the popularity of online shopping, which he called “transformative” for the retail industry.

Deak said there are substantial funds being put toward improving transportation, but not enough to meet the formidable challenge of easing highway congestion, repairing bridges and rails and dredging harbors.

In order to pay for a 30-year, $100 billion transportation improvement initiative, Deak said that Connecticut will be enacting “fiscal magic and slight of hand” – shifting a portion of sales tax intake to transportation, and possibly introducing gateway tolls at highway border crossings under the guise of environmental protection. Potential sites for these new tolls include I-95, I-91, I-84 and the Merritt Parkway.