Connecticut’s economy contracted between April and June with a 4.7% decline in gross domestic product, according to a recent report by the federal Bureau of Economic Analysis that found the state second to only Wyoming in GDP reduction.
The bureau, an office of the U.S. Department of Commerce, identified Connecticut’s finance and insurance industry as the leading factor in the state’s GDP loss in the second quarter of this year. The report also ranked last in the nation Connecticut’s 2.2% growth in personal income.
In a Monday phone interview, David Lehman, the state commissioner of economic and community development, said the quarterly reports were volatile snapshots that are routinely subject to significant revisions.
For instance, Lehman pointed to the BAE’s first quarter GDP metrics which found Connecticut with a negative 1.4% in GDP growth when it was released at the end of June. Friday’s report revised that underwater number to a 5.5% growth.
“I just think that given the volatility in terms of these quarterly numbers, we shouldn’t get too excited or too disappointed for that matter and we need to look at it over a longer time period and what that suggests is we are making progress,” Lehman said.
However, in a Friday press release, Connecticut Business and Industry Association President Chris DiPentima said the second quarter report should “sound alarm bells” for state policymakers and reflects a workforce shortage in Connecticut.
“The finance and insurance and manufacturing sectors, two critical components of our economy, saw some of the biggest declines in the second quarter,” DiPentima said. “The performance of those sectors, along with contraction in the construction and real estate sectors—which typically act as early warning signs—is very troubling.”
The apparently discouraging report also comes just five weeks before Election Day in a campaign cycle in which state Republicans have sought to cast Connecticut’s economy as ailing as a result of policies adopted by Democratic policymakers.
On Friday, Senate Minority Leader Kevin Kelly, R-Stratford, released a statement attributing the numbers in the BEA report to decisions made by state and federal Democrats.
“For anyone with their feet planted in the middle class, this confirms what we already know and why our groceries, gas and cost of living are becoming more unaffordable,” Kelly said. “There is a better way than the Democrat policies and the Biden economy that clearly aren’t working for our families.”
Lehman argued that the federal statistics actually painted a rosier picture of Connecticut’s economy over a longer time period. Over the past year, Connecticut’s GDP growth at 1.2% slightly outpaced the national average of 1.1%, he said.
“I’m taking the politics out of it and trying to focus on the facts,” Lehman said. “I don’t think it’s appropriate to look at one quarterly report after we’ve had three quarterly reports in a row that have been good and our annual numbers are better than the U.S. and far better than where Connecticut was.”