1 The Regional Economic Outlook Rae D. Rosen Senior Economist and Assistant Vice - President Federal Reserve Bank of New York January 5, 2006

2 Key Points: Connecticut’s economy is growing but the recovery in employment continues to lag the pickup in output. The recovery in employment has been slower than expected. Nominal job growth, less than one percent, is likely this year. In an era of slow job growth, attention to infrastructure and issues that affect corporate retention could help the region maintain its competitiveness and leverage the existing economic base.

3 Personal Income Percent change from 4 quarters earlier Percent United States New York Percent Source: Bureau of Economic Analysis, FRBNY calculations. Connecticut Massachusetts

4 Percent United States Percent Wages and Salaries Percent change from 4 quarters earlier Source: Bureau of Labor Statistics, FRBNY calculations. Connecticut Massachusetts

5 Percent Connecticut Expansion Patterns Increase from Employment Trough to Peak Source: Bureau of Labor Statistics, FRBNY calculations. Feb – Feb Dec – Dec Apr – Oct. 2005

6 Recent Trends in Regional Employment Percent change from 12 months earlier Percent United States Source: Bureau of Labor Statistics, FRBNY calculations. Connecticut Massachusetts

7 Recent Trends in Regional Employment Percent change from 12 months earlier Percent US Source: Bureau of Labor Statistics, FRBNY calculations. Connecticut Stamford Hartford Massachusetts

8 Labor Force Growth Slows Percent United States Source: Bureau of Labor Statistics, FRBNY calculations. Connecticut New York Massachusetts

9 Connecticut Net Migration Returns Source: Internal Revenue Service, Statistics of Income. 12

10 Connecticut Migration Returns Connecticut In Connecticut Out Source: Internal Revenue Service, Statistics of Income

11 Second District Unemployment Rates Source: Bureau of Labor Statistics, FRBNY calculations, *data as of September.

12 Net Domestic and International Migration April 2000 to December 2004 Source: U.S. Bureau of the Census.

13 Growth in Service Jobs % change November 2005 / November 2004 Source: Bureau of Labor Statistics, FRBNY Calculations.

15 Home Prices Percent change from 4 quarters earlier Percent Source: Office of Federal Housing Enterprise Oversight. United States New York Connecticut Massachusetts

16 Percent of Residential Mortgage Loans with Installments 90 Days Past Due Percent Source: Mortgage Bankers Association. New York Connecticut United States

17 Percent of Residential Mortgage Loans in Foreclosure Started During the Quarter Percent Source: Mortgage Bankers Association. Connecticut New York United States

18 Office Vacancy Rates Percent Metropolitan Stamford United States- Metropolitan Metropolitan NYC Hartford Source: Coldwell Banker, Cushman and Wakefield.

19 Appendix

20 Fairfield County Hartford County New York City (five boroughs) Median Household Income and Higher Education Source: U.S. Census Bureau, Census Note: Data are for counties, except where noted Percent of Population Age 25 and above with a Bachelor’s Degree or higher Westchester County Kings County (Brooklyn) Bronx County Suffolk County (Boston) New Haven County Median Household Income

21 Source: U.S. Bureau of the Census, American Community Survey Highest Degree Obtained Percent of population 25 years old and older

22 Connecticut Immigrant and U.S Born Population by Educational Level 25 Years Old and Older (Percent) Source: U.S. Census Bureau.

23 Earnings in Connecticut * Median Earnings 1999 for Connecticut population 25 and older with any income Source: U.S. Census Bureau.

24 Consumer Price Index Percent change from 12 months earlier Percent Source: Bureau of Labor Statistics, FRBNY calculations. CPI Services Durable Goods