Connecticut Economic Activity Report, Winter 2021 – Pompea College of Business

COVID-19 Highlights the Need for Another Emergency Food Stockpile • 14

Public–Private Partnerships and COVID-19 • 16

Expert Panel Says Connecticut is on a Slow Journey to Recovery • 18

Healthcare Costs in the United States • 20

CONNECTICUT ECONOMIC ACTIVITY REPORT Winter 2021

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

UNEMPLOYMENT

By Estanislao Desseno

B Prepared by the

New Haven Economic Performance Laboratory Online at www.universityofnewhaveneconlab.org in association with the Department of Economics and Business Analytics Pompea College of Business University of New Haven This report is generously underwritten by the Pompea College of Business Advisory Board.

2 / Unemployment 4 / New Haven Region Economic Performance Index

efore the COVID-19 pandemic, in March 2020, Connecticut showed an unemployment rate of 3.7%, while the national level was at 4.4%. During that time, New England’s unemployment rate was even lower, at 3%. Connecticut’s unemployment rate has followed a sustained downward trend since December 2010, where it reached 9.3%. However, after the pandemic began, we saw a rapid increase in these numbers, which more than doubled by April, reaching 8.3%. Although its increase slowed down after that, the highest peak was seen during July, when unemployment reached 10.2%.

Since the pandemic first hit, unemployment has fluctuated a lot. President Trump declared a national emergency on March 13, and, since then, the State Department of Labor said that by October it had received more than 965,000 state, federal, and extended benefits applications.

On April 23rd, the Connecticut Department of Labor stated they had provided $83 million in benefits the previous week and had processed 327,000 of the 402,000 applications received since March 13. In the previous five weeks, the agency had already provided $230 million in unemployment benefits. Unemployment by then was 7.9%, although the Office of Research estimated it at 17.5%.

By May, the unemployment rate was already 9.4%, and the Connecticut Labor Department had been awarded a $2.33 million federal grant to create temporary disaster-relief jobs for dislocated workers and other eligible individuals. The Office of Research estimate was close to 19%.

Figure 1: U.S. vs. CT Unemployment, 2010–Today

6 / Housing 8 / Cost of Living in Connecticut 12 / Wage Change 14 / Opinion: COVID-19 Highlights the Need for Another Emergency Food Stockpile 16 / Opinion: Public–Private Partnerships and COVID-19 18 / Opinion: Expert Panel Says Connecticut Is on a Slow Journey to Recovery 20 / Opinion: Healthcare Costs In the United States 22 / The Collective 23 / About the New Haven Economic Performance Laboratory Any opinion in this report is that of the author and does not necessarily reflect the opinion of the University of New Haven or the Pompea College of Business.

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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2021

June showed a faster response and increased stimulus efforts by the state.

Unemployment was at 9.8% already, with Office of Research numbers reaching 16–17%. Of the 635,772 applications received, the department had processed 617,296 of them. Claim processing time went down to one to two weeks from about six weeks during the height of the pandemic. Since March 13, 2020, CTDOL had distributed $900M in state unemployment benefit; $75M in Pandemic Unemployment Assistance (PUA); $38M Pandemic Emergency Unemployment Compensation (PEUC) for individuals who have exhausted regular UI benefits; and $1.76B in Federal Pandemic Unemployment Compensation (FPUC), the $600 additional weekly benefit that expired July 25, 2020.

While July showed the highest peak in unemployment rate at 10.2%, and 15% by the Office of Research, some of the effects of the stimulus produced the first signs of economic recovery since the pandemic began. This was manifested in the August unemployment numbers, which were down to 8.1% by BLS numbers, and 14–15% by the Office of Research.

Figure 2: Unemployment Rate CT Since COVID-19

Further recovery was seen in the next months, with 7.8% unemployment in September, and the August jobs increase was revised up to 21,900 gains. At that point, Connecticut had so far recovered 60% of jobs lost during the pandemic-related job declines of March and April. Moreover, during mid-September, the state distributed $301 million to nearly 146,000 residents in three days. This measure was taken due to the lack of additional Federal stimulus. Finally, it was announced that, starting October 4, people filing new unemployment claims would be eligible for an additional $18 per week, according to the State Department of Labor.

Misclassification for September was 12–13%.

The latest unemployment numbers were announced on November 19th. Data shows that CT got back 14,100 additional nonfarm payroll jobs in October 2020, and the unemployment rate is at 6.9%, with Office of Research data showing 10-11% unemployment.

While the U.S. economy continues to improve, we should still focus on further stimulus from the Federal Reserve to help maintain the recovery. In Mid-September, the FED economic projections predicted that unemployment would fall to 7.6% by the end of the year. However, the current unemployment rate, as of November, was already at 6.9%, beating these forecasts.

Moreover, we are yet to see the effects of the extended unemployment benefits provided by the State of Connecticut in late September and early October, which will probably help improve future economic recovery.

“Unemployment Rate in New England Census Division.” FRED, Federal Reserve Bank of St. Louis. October 20th 2020. https://fred.stlouisfed.org/series/CNEWUR “CTDOL Monthly 2020 Labor Situation Release.” 2020 News Releases, State of Connecticut Department of Labor. www.ctdol.state.ct.us/communic/newsrels/nr2020.htm.

“Chair’s FOMC Press Conference Projections Materials” Economic Projections, Federal Reserve, September 2020. www.federalreserve.gov/monetarypolicy/files/ fomcprojtabl20200916.pdf “CT Catches up on Delayed Federal Unemployment Relief.” The CT Mirror, 29 Sept. 2020, ctmirror.org/2020/09/29/ct-catches-up-on-delayed-federal-unemployment-relief/.

“Weekly Unemployment Benefits for New Filers to Increase.” NBC Connecticut, NBC Connecticut, 30 Sept. 2020, www.nbcconnecticut.com/news/coronavirus/weeklyunemployment-benefits-for-new-filers-to-increase/2339665/.

Estanislao Desseno ’21 Major: Economics with a Finance Minor Hometown: Buenos Aires, Argentina

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NEW HAVEN REGION ECONOMIC PERFORMANCE INDEX

By Michael Pergola

W

hen looking at how the economy of New Haven performed in the last six months, it is important to look at the NHREP (New Haven Region Economic Performance) Index. There are five key factors that are used in determining this statistic: education & health services for employees in New Haven, New Haven building permits, initial claims for unemployment benefits, average weekly hours of work, and average weekly earnings for all employees in New Haven. It must be noted that the results the index will show were impacted by the COVID-19 pandemic.

As you can see, there was a sharp decline in the beginning of 2020. This was likely caused by the number of businesses forced to shut down, which had an impact on weekly earnings, weekly hours, and the unemployment rate. This is clearly reflected in the graph.

You can also see that New Haven has experienced a mild rebound and now has been showing a steadying trend. The policies that Connecticut enacts in the coming months will be key to determining whether this rebound is sustainable.

One of the main effects of the COVID-19 pandemic is its negative effect on the unemployment rate.

According to last year’s Economic Activity Report, the unemployment rate in the New Haven Region was 3.6%. Since then, New Haven has seen its unemployment rate rise to as high as 10.5% in July 2020. The current unemployment rate, according to the latest economic data, is 7.8%.

As Table 1 shows, New Haven experienced a sharp increase in unemployment at the start of the pandemic but has been gradually normalizing since many businesses have reopened. Overall, there was a net increase in the unemployment rate of about 4.2 percent since January 2020. It must also be noted that the current 7.8% unemployment number is not as reliable as most months. With a lot of misclassification due to the current situation, it is estimated that the unemployment rate could be around 12%.

When looking at Table 2, you can see that from 2016 to 2019, the NHREP Index showed very positive results, as the unemployment was low, which led to more stable weekly earnings and weekly hours numbers.

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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2021

Figure 3: New Haven Region Economic Performance

Table 1 Unemployment Rates

New Haven

Connecticut

United States

6%

5.50%

4.90%

July 2016

5.40%

5.10%

4.80%

January 2017

5.40%

4.90%

4.70%

July 2017

4.90%

4.60%

4.30%

January 2018

5.10%

4.50%

4.10%

July 2018

4.30%

4.10%

3.80%

January 2019

4.40%

3.80%

4.00%

July 2019

3.90%

3.70%

3.70%

January 2020

4.20%

3.70%

3.60%

July 2020

9.70%

10.20%

10.20%

September 2020

7.10%

7.80%

7.90%

January 2016

In 2020, there was a sharp decrease in the index. This NHREP Index Year was due to the closure of many businesses and many 2015 200 of those were permanent.

2016 190 This had an effect on New Haven building permits as 2017 235 many owners were not able 2018 240 to pay their rent. This led to 2019 265 a loss in many jobs, having 2020 110 obvious effects on the NHREP. September 2020 shows an Sep-20 170 encouraging bounce back but not to pre-pandemic levels. We would hope to see a continuation of these trends as that would give more hope that New Haven will return to the previous year’s performances.

Table 2

This forecast, as shown in Table 3, predicts a reasonably likely chance that New Haven continues its upward trend back towards pre-pandemic levels. The forecast model also does show that there is a chance that New Haven does reverse course and experience a setback in the recovery. This result from our model confirms that the current economy is trending in a positive direction along with a lot of America, but there is a chance for another setback if

businesses are forced to close again. With a vaccine getting close to being available to the public, along with numerous therapeutics that have been proven to fight against the coronavirus, there is no reason to have more lockdowns. In this author’s opinion, they are not scientifically proven to work. If anything, lockdowns cause more damage. In the current situation, it appears that there are a lot of people talking about enacting another lockdown. If that occurs, then the low range of the forecast model is likely to be the outcome.

Another strong factor in a region’s economic performance is crime rates. High crime will have some level of effect on all of the factors that make up the NHREP. According to New Haven Crime Data, the region is considered to be less safe than 96% of U.S. cities. New Haven has four times the violent crime rate as the rest of Connecticut. If New Haven is to prosper economically, there must be a solution to the current crime rate in the region. To conclude, the evidence suggests we should be pretty optimistic of New Haven’s economic standing, as long as we continue to reopen businesses and do not revert back to previous policy decisions.

Table 3 DATE

LO 80

HI 80

LO 95

HI 95

SEP-20

126

179

112.3

192

OCT-20

120

185

102.9

202

NOV-20

116

192

96.1

212

DEC-20

118

203

95

225

JAN-21

109

203

84.5

227

FEB-21

115

216

88.2

243

• Crime Data: www.neighborhoodscout.com/ct/new-haven/crime

Michael Pergola ’21 Major: Economics with a Finance Minor Hometown: Long Island, NY

• Unemployment Data: https://ycharts.com/indicators/new_haven_ county_ct_unemployment_rate#:~:text=New%20Haven%20 County%2C%20CT%20Unemployment%20Rate%20is%20at%20 7.80%25%2C,long%20term%20average%20of%2021.30%25 • Hourly Wage Data: https://fred.stlouisfed.org/series/ SMU09757000500000003 THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

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THE EFFECT OF COVID-19 ON THE HOUSING MARKET AND CITY/SUBURB MIGRATION

By Matthew Liscio

S

ingle-family home prices in Connecticut remained relatively stable between November 2010 and November 2019. Between those dates, there was a 0% change in single-family home values in the state not accounting for inflation.1 During the COVID-19 economy, it has been all but the same story for single-family homes in Connecticut. From November 2019 to September 2020, single-family home prices in Connecticut have risen over 6%.2 Basic economics tells us rising prices are caused by a decrease in supply and/ or an increase in demand. The data shows us that there was a steep decline in single-family homes in March–April 2020.

According to Redfin, a national real estate brokerage, active listings for single-family homes were down 29% in May from the previous year.

Figure 4: All Single Family Homes for Sale in Connecticut

The decrease in inventories is highly unusual and statistically significant. There are two main causes for this. The first is many people feel uncertain about the future.

During the height of the first COVID-19 wave, there was a substantial decrease in job stability due to the increasing unemployment and increasing uncertainty in the markets.

Figure 5: All Condo/Co-ops for Sale in New York, NY

The second cause for the drop in inventories is many homeowners who want to sell do not want potentially infected people walking through their house. That group of people may plan on selling their homes when the virus is over. This may cause a potential influx of inventories in the future when the infection rate is relatively controlled.

Not only is supply decreased but demand has also increased. Many people are moving out of the major cities, and many people are moving to the suburbs. Due to the new work from home way of life, the need to live near the office has been diminished. According to Redfin, in July 2020, the number of Condominiums and Co-ops on the market in New York City increased 21%. Since then, the market has only become more saturated, with a 106% increase in inventory during the month of September from a year ago. This caused the prices of condos in New York City to decrease over 39% in July 2020. On the other end of the spectrum Fairfield County, Connecticut’s closest suburb of New York City, saw a 16% increase in single-family home values in July 2020. These data are telling us that many people do not see the value of living in big cities at this point. Currently, because of the virus and new technology, suburbs can offer everything virtually that a city offered in person.

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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2021

Figure 6: Median Sale Price for all New York, NY Condo/Co-ops

The economy is uncertain, and the ability to sell a house is harder with social distancing requirements. Due to that, many people are not moving. Of the group of people who do not plan on moving, they are taking their newly acquired wealth from the housing market and investing it in home improvements. This can be seen in the growth of sales from companies like Home Depot and Lowes over the past six months. Home Depot total sales in Q2 2020 increased 23.4% from Q2 2019.3 Similarly, Lowes sales in Q2 2020 increased by 35.1% compared to Q2 2019.4 When faced with the reality of working from home, many saw it as an opportunity to improve their home. Many home improvements are proven to increase property values such as a minor kitchen remodel, new siding, or new garage doors.5 With the Fed’s decision to keep interest rates at or near 0% until the economy weathers the effects of the coronavirus, buying a new home or refinancing an existing mortgage can be an advisable financial decision.6 “A 0.75 percentage point drop may not seem like a lot, but it’s like handing $40,000 to a buyer of a $475,000 home, who is able to get more house for the same monthly payment,” said Taylor Marr, senior economist at Redfin.7 When interest rates are low, it will highly incentivize people to spend money and take out loans.

Social distancing has also forced many businesses to force work at home, negating the need to live near the office.

There is a possibility that working from home will remain well after there is a vaccine distributed, similar to how in the 1960s the automobile made it possible for families to move to suburbs. Families and individuals who are moving out of the cities are expecting that the new work from home way of life will stay. They expect to use teleworking systems to get to work in the future instead of using their car. The families living in the suburbs are reaping the rewards of higher property values due to the increased demand from this phenomenon.

It is reasonable to assume this trend will continue because many businesses have found that productivity has remained the same or increased compared to working in a physical

Figure 7: Median Sale Price for All Connecticut Single Family Homes

office building. This is because employees no longer have their daily commute and unnecessary meetings distracting them.8 If employees are just as productive at home, it saves the company the expense of office buildings, thus, decreasing their expenses and increasing profits.

There are many benefits to remote working. For the individual, they consist of increased productivity, freedom, and time. For many companies, their benefits are increased productivity, lower rents, decreased travel expenditures, and a larger available talent pool. Combine all this together, it becomes clear that going back to the way things were would be irrational. It also becomes clear that suburban home values will continue to benefit from this new trend for the foreseeable future.

www.zillow.com/ct/home-values/

1

www.zillow.com/ct/home-values/

2

3

my.apps.factset.com/viewer/?_doc_docfn=U2FsdGVkX1%2BBWMySDqzIuzvZ ELmNRvxaicljREGpteEQtAfaW9yq4uvSHuSfMVDyA5ETO7QWMctWqWW93 8EkEi53mRBXNo%2FH2BI3izyjk51wIV%2FAZFOdvmEsQVuevh%2Fw&_doc_ product=SA&_doc_id=sa_story_2857544&_dd2=

4

my.apps.factset.com/viewer/?_doc_docfn=U2FsdGVkX19mE19j9P0PHd4AL tFoxiIj7qbp7IOvcR7eVcGQQC4GEHn%2BUgNj6aE%2FtmC3vHFMvtCmpHGw sfRy4hMqeSSFiZKy%2FQk4L%2FuAtGn4tLWwODlUwcUls5Kkuouc&_doc_ product=SA&_doc_id=sa_story_2858302&_dd2=

5

www.zillow.com/sellers-guide/best-home-improvements-to-increase-value/

www.bankrate.com/banking/federal-reserve/interest-rate-pause-biggestwinners/

6

Matthew Liscio ’21 Major: Behavioral Economics with a Finance Minor Hometown: Shelton, CT

www.foxbusiness.com/real-estate/home-prices-climb-to-record-in-coronavirus-pandemic-as-buyers-seek-space

7

8

www.business.com/articles/are-employees-more-productive-working-fromhome/#:~:text=In%20an%20Airtasker%20survey%2C%20remote,during%20 the%20typical%20working%20day.&text=In%20a%20Stanford%20 study%2C%20remote,compared%20to%20their%20office%20counterparts.

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7

COST OF LIVING IN CONNECTICUT

By Kyle Longo

T

he estimated cost of living for an area, in simple terms, is the cost of survival. The cost of living varies vastly by state, city, and even by town. The calculator used for cities in this article comes from the website salary.com.1 Salary.com is a respected company that specializes in data, technology, and consulting services. The data discussed comes from their calculations based on the total costs of five factors: “housing, food, healthcare, transportation, and energy.”1 The calculator used for states derives from the Missouri Economic Research and Information Center (MERIC) and focuses on the 2020 average for Q3.2 The calculators are similar because, at MERIC, they take the average costs of similar indexes: “grocery, housing, utilities, transportation, health and misc.”2 This section is meant to compare the cost of living in different Connecticut areas and to discuss Connecticut’s standing in the nation.

The data presented show by how much percentage, above or below, each state, city, or town is from the national average. The 14 largest cities included in Connecticut are Bridgeport, New Haven, Hartford, Stamford, Waterbury, Norwalk, Bristol, Danbury, East Hartford, Fairfield, Greenwich, Hamden, Manchester, and Meriden. The 14 randomly selected smaller areas are Collinsville, Orange, Norwich, New Milford, Colebrook, Deep River, Stevenson, East Glastonbury, Bethel, Jewett City, Botsford, Wauregan, Oxford, and Torrington.

A state analysis from MERIC shows that CT is in the top 10 of the highest cost of living in the United States. Currently, it stands at number 9, with about a 5.7% difference from placing number 10.6 Figure 10 shows the top 10 states with the highest cost of living, while figure 11 shows the top 10 with the lowest cost of living. Interestingly, the top 10 highest states seem to be toward the coasts or islands, and the top 10 lowest states seem to be in the South and Southwest. On top of this, the spread of the data is vastly different. While the lowest states have a less than 6% difference between the first and last, the higher cost states have close to a 77% difference between number 1 and number 10. 6 Overall, Connecticut is

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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2021

Figure 8: Cost of Living % Above National Average: Large CT Cities

Figure 9: Cost of Living % Above National Average: Smaller CT Cities

Figure 10: Top 10 Highest Cost of Living: U.S. States and Territories

one of the most expensive areas in the United States, which could mean that younger people with a smaller income may decide to avoid moving to Connecticut or leave altogether.

Figure 11: Top 10 Lowest Cost of Living: U.S. States and Territories

The cost of living in an area is a concept that should be taken into consideration when an individual decides to move. Even though Connecticut is seen as having one of the highest costs of living, some areas deviate from the average and lie below. Nationally speaking, Connecticut has one of the highest costs of living. The state of Connecticut is a beautiful New England state with long, warm summers and extravagant, snowy winters. But such beauty, like in most cases, comes with a cost. In this case, it is the high cost of living.

Kyle Longo ’21

www.salary.com/research/cost-of-living/ct#locationdesc

1

meric.mo.gov/data/cost-living-data-series

2

Major: Economics, with a concentration in Behavioral Economics

3

www.salary.com/research/cost-of-living/ct#locationdesc

4

www.salary.com/research/cost-of-living/ct#locationdesc

Hometown: Danielson, CT

5

meric.mo.gov/data/cost-living-data-series

meric.mo.gov/data/cost-living-data-series

6

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9

WAGE CHANGE

By Sean Patrick

T

his dataset is built using data gathered from the U.S. Bureau of Labor Statistics, State Occupational Employment, and Wage Estimates. The data are of the Northeastern region of the United States, Connecticut, District of Columbia, Delaware, Maine, Maryland, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. The dataset is a multivariate annual data set of all occupations by State, Year, Employment (The estimated total employment rounded to the nearest 10 excludes self-employed.), Employment RSE, Mean Wage RSE (Relative Standard Error (RSE) is a measure of the reliability of a statistic.

The smaller the relative standard error, the more precise the estimate), Mean Hourly Wage, Mean Annual Wage, Yearly Percent Change In Hourly Mean Wage, and Yearly Percent Change in Annual Mean Wage.1 The purpose is to report on nominal wage changes

from 2008 to 2019, concerning Connecticut, other states of the region, and the national target rate and the national actual. (This dataset does not take into account 2020 or COVID-19.)

The current growth target for nominal wages is 3.5% to 4%, which is the national growth target based on the Federal Reserve’s 2% price inflation goal and the 1.5% to 2% productivity growth. The actual national change in nominal wages is 3.0% as of February 2020.2 Connecticut’s mean nominal hourly wage has increased year over year but has not met the target growth rate from 2009 to 2019.

The change in wage rate was 2.898% (2009) and 2.601% (2019), a (0.297)% change in rates. The mean nominal hourly wage has been increasing at a fluctuating rate in Connecticut. Connecticut has yet to recover as of 2019 from the 2008 Financial Crash, in terms of mean

Figure 12: Yearly Percent Change in Hourly Mean Wage by Year and State

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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2021

growth in the Northeast. However, only three states met the national target (Maryland, 3.613%, Pennsylvania, 3.482%, and the District of Columbia, 4.325%). As of 2019, Connecticut fell down the ranking to 7th at 2.601%. Rhode Island’s mean nominal hourly wage change did a complete turnaround at 4.402%, 0.902% higher than the minimum target. This indicates that Rhode Island, in terms of mean nominal hourly wage change, has recovered and surpassed its financial crash position. Maine, 3.556%, and Rhode Island, 4.402%, based on the 2019 dataset, met the growth target for nominal wages.

nominal hourly wage growth. Mean nominal hourly wage growth plunged to 1.878% and hit its lowest point in 2014 at 1.185%, with a quick turnaround in 2015 to 2.229%. The rate has had to recover from the 2014 minimum and has yet to regain the change in wage rate pre-financial crisis. Change in the mean nominal hourly wage between 2017 to 2019 is increasing but is still almost 1% off of the lowest end on the target growth rate of 3.5%.

Comparing mean nominal hourly wage change among the Northeast United States in 2009, the District of Columbia had the highest mean nominal hourly wage change at 4.325%, meeting the and surpassing the growth target for nominal wages, but there is a caveat to this. The relative standard error for the DC wage data had an average of 6.7%. Meaning the mean nominal hourly wage change for DC possesses a high variance as well.

Wage growth is a good indicator of the financial health of a state.

If there is evidence of increasing wages in a state compared to others it might entice people to look for employment in that state. Population changes have the potential to alter consumption and GSP for that state. This dataset does not consider the cost of living by state, which may influence wages in that state.

Connecticut ranked 6th based on 2009’s 2.898%. Rhode Island ranked last at 2.108%. In 2009 Connecticut was not competitive compared to half the states when looking at potential wage

Sean Patrick ’21 Major: Economics with a concentration in Business Analytics

1

“Tables Created by BLS.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 8 June 2020, www.bls.gov/oes/tables.htm.

2

“Nominal Wage Tracker.” Economic Policy Institute, EPI , www.epi.org/nominal-wage-tracker/.

Hometown: North Canaan, CT

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11

PCE IN CONNECTICUT’S 2019 ECONOMY DOES NOT LOOK PROMISING FOR ECONOMIC RECOVERY FROM THE COVID-19 PANDEMIC

By Hannah Providence

P

ersonal Consumption Expenditures (PCE) illustrates quite an interesting story for Connecticut. Data for PCE by state is released once a year, and last month we received data for 2019.

We won’t see the impacts of COVID-19 on PCE in Connecticut until 2021.

To coincide, financial services also made the highest positive contribution to Connecticut’s total PCE percentage change growth with .72%. In addition, although the state’s percent change growth in health care is below the state average, that category made .69% impact to the percent change in total PCE.

Still, we can make predictions on how the percentage change will trend overtime with the current data and determine how much, if at all, Connecticut’s economy will grow from consumer spending.

The significant growth in financial services is likely to continue during the pandemic because of the location of Connecticut. As the virus spreads, more residents from nearby hot states like New York may be inclined to move to Connecticut. This could increase the number of financial services for Connecticut and subsequently continue to significantly affect its percent change.

The Huffington Post reported data from the U.S. Department of Commerce, saying Connecticut residents experienced a 2.9% increase in consumer spending on goods and services from 2018 to 2019. This 2.9% is well below the average PCE at 3.9% and is in fact the 13th lowest across the country.

The Commerce Department’s Bureau of Economic Analysis (BEA) said spending on housing and utilities (+4.3%) and on health care (+4.5%) drove expenditure growth rates in every state last year, though Connecticut saw lower growth in those categories (3.4% and 3.9%, respectively).

In 2020, several entities are watching the PCE trend throughout our current recession to determine what aspects of consumer spending are in the best and in the worse shape. In September 2020, the Federal Open Market Committee highlighted key categories in PCE that were significantly affected by the pandemic. “In August, the components of retail sales used to estimate PCE, along with the sales of light motor vehicles, increased further” (FOMC, 2020).

States who have already seen a growth in retail and motor vehicles before the pandemic likely have a head start in economic recovery now that those categories are on an upwards trend.

Reviewing these numbers, it seems as though Connecticut is not in the best position to gracefully survive a shock in its economy like the pandemic. Especially when it is underperforming (in comparison to the state average) in a service like Figure 13: Food Services and Accommodations PCE % Change from 2018 to 2019 health care — a service that is imperative to the current pandemic.

But there may be hope for Connecticut’s PCE growth after all. In 2019, Connecticut realized significant growth in financial services and insurance. BEA data states a 7.5% growth for Connecticut, the third largest increase for any state, behind Kentucky only slightly as they report a 7.6% growth, and Utah reporting a 10.5% growth.

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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2021

Connecticut unfortunately does not appear to be in this position.

Although PCE for motor vehicles and parts have reported downwards growth for the U.S. in 2019 (-.6%), Connecticut experienced an even more significant decrease (-1.1%).

tion during the pandemic because this sector of the economy takes a harsh hit in demand and consumer traffic. The future revenues of the restaurant market and similar accommodations will continue to plummet as the second wave of COVID-19 continues to worsen.

The FOMC also noted that, “recent high-frequency indicators of spending on some consumer services — such as restaurant dining, hotel accommodations, and air travel — were still subdued” (FOMC, 2020). Connecticut was not experiencing growth in those back in 2019 as Figure 13 illustrates. The U.S. experienced a 4% growth in food services and accommodations from 2018 to 2019, and the Northeast region experienced more significant growth at 4.6%.

However, Connecticut only experienced 1.6% in this category. The slower growth for Connecticut does not put it in a desirable posi-

In conclusion, PCE percent change growth for Connecticut is not a rosy picture. Connecticut lags the nation overall in PCE growth from 2018 to 2019 and in certain key areas. This may be of detriment for Connecticut and its residents during this pandemic. However, Connecticut’s strength in financial services and the overall nation’s upward PCE trend since the recession started may give the state some hope.

Hannah Providence ’21 Major: B.A. Economics, Minor in Professional and Technical Writing Hometown: New Haven, CT

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13

OPINION

COVID-19 HIGHLIGHTS THE NEED FOR ANOTHER EMERGENCY FOOD STOCKPILE

By Matthew Liscio

C

OVID-19 has disrupted many parts of the United States economy since March. One of the most impacted parts of the U.S. economy is the food industry, specifically its supply chain, and our farmers. Up until COVID-19, supply chains for food were highly calculated and extremely data-driven to prevent food waste and optimize profits. Farmers relied on relatively consistent orders from distributors because their ability to pivot was not great due to the many underlying problems that existed long before COVID-19. The supply chain also could not pivot in the event of a humanitarian crisis because of poor risk management across the board and adverse economic incentives.

Farmers have contracts to produce a certain amount of a commodity and are expected to deliver that product to the buyer on a certain date.

These contracts will determine what farmers will do with their product.

During pre-COVID times, this system was highly efficient but relatively inflexible. There was an economic incentive for efficiency but no economic incentive to create a contingency strategy. There was an apparent lack of risk management that did not take into account the event of a highly infectious disease spreading around the world when experts predicted that such an event was inevitable. Management across the board was not prepared for a pandemic. In March the systematic weaknesses already apparent in the agriculture industry were exacerbated. The lack of flexibility led to increasing food waste and bottlenecks in the supply chain.

When consumer spending at food service firms decreased by 27% and consumer spending at grocery stores increased by 29%, the supply chain was not able to pivot quickly enough.1

This substantial shift in how consumers are spending their money is sending shockwaves throughout the supply chains. Farmers, food-service producers, and processors cannot pivot quickly from serving the restaurant industry to the grocery store industry. “Many food-service producers have already invested in equipment and facilities to produce and package food in large multi-serving formats for complex prepared-, processed-, frozen-, canned-, and packaged-food value chains. It would be highly inefficient to reconfigure those investments to single-serving sizes.”2 Farmers were in a race against time to figure out what they needed to do with all their product. At the same time, the number of farmworkers available in the United States was greatly reduced. “Only three in ten workers in the US agricultural workforce are born in or are citizens of the United States.”3 When the United States closed its borders, many seasonal agricultural workers from Mexico were not able to come into the country, thus making it harder to harvest crops.

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Figure 14: U.S. Consumer Food Spending March 2019

Figure 15: U.S. Consumer Food Spending March 2020

This employment shortage situation that existed before COVID-19 and heightened during the pandemic will expedite the shift to the use of automation. Increasing the use of automation will help the agriculture industry in three ways. It will reduce labor costs, increase production, and mitigate risk, as machines cannot get sick.

When news of the social distancing struggle in factories and processing plants broke, many consumers started to panic, causing the shelves to empty for many products. This made it appear that, across the country, there was a meat and dairy product shortage. The panic buying had a snowball effect to it. Before many production facilities could adjust, shelves across the country were empty. The production facilities and supply chain were not prepared for the sudden surge in consumer demand.

It has become more difficult at every step, from field to table, to get food to the consumer because of the new social distancing requirements at farms, food processing plants, warehouses, grocery stores, and restaurants. These requirements need to be kept in balance with supply chain logistics because arguably, unlike many other industries, the food industry is essential for life. When employees have to maintain a distance from one another in factories, it reduces the

capacity of the warehouse and, in turn, reduces production.

This is in addition to many employees calling out because of the fear of getting sick at work or other employees contracting the disease and needing to quarantine. Lower production capabilities can lead to product shortages.

Figure 16: Effective Federal Funds Rate, Percent, Daily, Not Seasonally Adjusted

The supply chain fell apart from external events that it was not capable of handling. To prevent events like this from happening again, I recommend that the government maintain an emergency stockpile of food and other household goods that can be distributed to affected areas within the United States quickly. This is something that can easily be done because the U.S. federal government has done it once before in the 1980s Farm Crisis.4 The system I recommend would be similar to the one enacted in the 1980s. In the 1980s a series of national and international events put many farmers in a tough spot.

Inflation skyrocketed in the late 1970s, and, in an attempt to control inflation the Fed raised interest rates to 22% in December 1980. This affected farmers severely because farmers borrow large amounts of money to pay for machinery, land, and other supplies.

Due to technological advancements, farm production had improved greatly compared to years past, resulting in a surplus of farm commodities.5 Then in the 1980s, President Jimmy Carter halted grain shipments to the Soviet Union.6 The surplus in the supply of commodities and the decrease in demand drove commodity prices down. Net farm income fell from $34 billion in 1973 to $14 billion in 1983.

The government decided to help out farmers by purchasing millions of gallons of milk and processed the milk into cheese, butter, and dehydrated milk. The over 500 million pounds of dairy product was stored in warehouses and caves in over 35 states.7 The cheese did not go to waste. President Reagan signed the Temporary Emergency Food Assistance Program that authorized the government to hand out the cheese to the elderly and low-income people.8

The program was relatively successful in getting food to people in need. It also helped out farmers who were on the brink of bankruptcy by purchasing the excess supply that would have otherwise been thrown out. Unfortunately, this year, we are facing the same problems that existed in the 1980s. A program similar to the Temporary Emergency Food Assistance Program would be extremely beneficial to America, as it would decrease farm commodity waste, and it would help feed people in need. This program will be able to correct the bottlenecks in the supply chain experienced during the pandemic.

In addition, we need to utilize to the best of our abilities the advantages of automation in agriculture that did not exist in the 1980s. There are many advantages of using machines over people, as we have already seen in other industries such as manufacturing, health care, and even fast food. It cuts down costs, increases productivity, and it is more reliable than people. All these things will benefit the consumer. Reliability is of the upmost importance now and in the future as the future, has never been more uncertain. As Americans, we do not often think about food availability, but, when we do, we worry and fear the worst and potentially cause consumer induced shortages. Automation and a national stockpile of food will solve these issues and ensure that America will always be fed during a crisis. COVID-19 is not the last crisis this country will ever face; therefore, when the next crisis arises, we need to be prepared for it by being able to feed our people.

www.mckinsey.com/industries/consumer-packaged-goods/our-insights/usfood-supply-chain-disruptions-and-implications-from-covid-19#

1, 2, 3

Matthew Liscio ’21 Major: Behavioral Economics with a Finance Minor Hometown: Shelton, CT

4

abcnews.go.com/Business/story?id=4770135&page=1

5

www.farmprogress.com/marketing/taking-look-back-1980s-farm-crisis-andits-impacts

www.iowapbs.org/mtom/classroom/module/13999/farm-crisis#:~:text=The%20 1980s%20Farm%20Crisis%20module,history%2Dmaking%20high%20interest%20rates

6

www.history.com/news/government-cheese-dairy-farmers-reagan

7, 8

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

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OPINION

PUBLIC–PRIVATE PARTNERSHIPS AND COVID-19

By Kyle Longo

A

s the world engages in the ultimate struggle with containing and eradicating the coronavirus (COVID-19), one massive question looms: how can the government quickly and efficiently obtain and distribute an effective vaccine? The cost of procuring a vaccine is something that affects everyone. According to the Trump Administration’s Operation Warp Speed (OWS), a COVID-19 vaccine will be free for the American people.1 But, what does the word free mean in this case? It means that, like COVID-19 testing, individuals will not front the bill, but rather the government will pay for it using taxes.

Since the start of the pandemic, the U.S. government has entered contracts with private companies to ensure the procurement of an effective vaccine and only time will tell if this method is successful.

There is some background information that needs to be taken into consideration when analyzing what is happening. Over the summer, the U.S. government made a deal with the companies Pfizer and BioNtech. This deal states that the United States will pay $1.95 billion for 100 million doses on arrival, along with the possibility of purchasing another 500 million in the future.2 This deal implies a cost of $19.50 per dose for purchasing the vaccine. In an individual case, this seems like a small cost that could easily be covered. The problem is that this is only a ploy to incentivize prompt vaccine production. As stated by President Trump, the current plan is to utilize the military for distribution, so the cost on the taxpayer will be considerably grander than $19.50 per dose. It is also worth noting that, before this contract, Pfizer was not a part of OWS. It was a third party that had proven to be more efficient than the OWS companies. Therefore, it signed a public–private partnership (PPP) after being seen as a promising candidate. This contract is just an agreement between the government and a private company where the private company is paid upon receipt of the good in bulk to reduce the overall public cost.3 By doing this, the public can save money, as the company takes a significant amount of the risk, such as being able to create the good up to required standards (in this case, FDA standards).4 OWS since March has incurred a cost to the United States in the billions of dollars. Recent news shows us the vaccines that are furthest along come from the partnership between Pfizer and BioNtech

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and their main competitor Moderna. On November 9th, Pfizer and BioNtech announced a vaccine that reached a 90% effectiveness rate, and the following week Moderna announced a 95% effective vaccine. Then, on November 18th, Pfizer announced it had reached a vaccine with 95% efficiency. At this point, these companies seem to be the farthest along. Others are promising (such as Johnson and Johnson), but not as much as these recent announcements.

By using PPP, OWS is creating a competitive market where every company has the most incentive to finish first and with the lowest possible price. By doing this, prices are naturally going to decrease.

This fact alone is why PPP are some of the most paramount partnerships during a crisis. As much as everyone would hope that doing work for the common benefit would outweigh the need for financial compensation, that is not the real world. People need incentives to be encouraged enough to follow through on hard work and do the right thing. To simply put it, without government incentives, the scientists and companies working on a vaccine would not be working as quickly and as carefully as they are now. A promise of close to $2 billion is something that a company does not take lightly, and Pfizer shows it is doing everything in its power to perfect the vaccine.

The United States is not the only nation to engage in this practice with these companies. For example, after Moderna’s recent announcement of a 95% effective vaccine, the Health Secretary of the United Kingdom, Matt Hancock, announced they reached an agreement for five million doses.5 Nations around the world are contributing to this incentive effort through PPP. By the world putting their hope into private companies, we can see the market work at its best.

In a way, the world is watching what could be considered a modernday Space Race, but instead of nations, it is between companies.

If the COVID-19 vaccine is a success through the PPP method, then the U.S. government should consider supporting new initiatives that allow private companies to take over public sectors. The U.S. government understands that they were not best equipped to develop a COVID-19 vaccine themselves and needed to contract with private agencies. They should consider this as a wake-up call that they can’t do everything effectively, such as taking control of healthcare. This

also holds true in other sectors. The recent usage of companies like SpaceX to send American astronauts into space is a prime example of how the United States can work with companies to advance the nation’s common interests. Ronald Reagan said it best when he said, “The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.”6

www.hhs.gov/about/news/2020/07/22/us-government-engagespfizer-produce-millions-doses-covid-19-vaccine.html#:~:text=The%20 vaccine%20would%20be%20available,of%20administering%20the%20 vaccine.

1

www.pfizer.com/news/press-release/press-release-detail/pfizer-andbiontech-announce-agreement-us-government-600

2

3

Kyle Longo ’21 Major: Economics, with a concentration in Behavioral Economics Hometown: Danielson, CT

4

5

https://ppp.worldbank.org/public-private-partnership/overview/whatare-public-private-partnerships

www.investopedia.com/ask/answers/021715/what-impact-publicprivate-partnerships-have-economic-growth.asp

www.bbc.com/news/uk-54963377

6

www.reaganfoundation.org/ronald-reagan/reagan-quotes-speeches/ news-conference-1/

THE ONLY STUDENT ECONOMIC COLLECTIVE IN THE NATION

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OPINION

EXPERT PANEL SAYS CONNECTICUT IS ON A SLOW JOURNEY TO RECOVERY

By Hannah Providence

S

even months ago, the University of New Haven conducted a research study with five expert economists and business professionals to try and determine when the Connecticut economy will fully recover from the recession.

Figure 17: Trend of Nonfarm Employment Levels in Connecticut

Conducting the study using the Delphi technique — an iterative research method designed to predict practical solutions with limited data — the experts were able to predict that Connecticut’s economy will take at least five years to recover from the pandemic.

Now, seven months later, the panelists have more data regarding Connecticut’s resilience, or lack thereof, to the current recession.

This time though, experts were joined by two additional participants — one other economist and another business professional — to participate in this new Delphi study and analyze key performance indicators in the state’s economy.

The results were quite conclusive.

All panelists agreed or somewhat agreed that, in 12 months, Connecticut’s economic performance will either be the same as or slightly worse than the national and the Northeast region’s economic performance.

This consensus was made through an analysis of both the unemployment rate and employment level in Connecticut, as it compared to the nation (see Figure 17) and its region.

The employment level (as seen in Figure 17) in Connecticut was analyzed further, and the majority of panelists agree that levels will either remain steady or be on an upwards trend in 12 months. All agreed, however, that it will take more than 12 months for the employment level to fully recover from the current recession.

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Figure 18: Trend of Nonfarm Employment Levels Nationally

One expert provided their perspective on Connecticut’s performance in one of the sectors greatly affected by the pandemic — small businesses. The Hartford Courant reported a small business coalition formed by dozens of small businesses in Connecticut who pleaded for Governor Ned Lamont to create a small business grant program with $70 million (Gosselin, 2020). Gov. Lamont did quickly establish a grant program for small businesses, but only for $50 million (CT Gov, 2020). The short-handed support of Connecticut’s government to their small businesses may be a factor that could cause Connecticut to tread behind the nation in recovery. The health of the small business industry is incredibly important nationwide and in Connecticut, nearly half, or 745,000, of the state’s “1.5 million strong workforce” are employed by small businesses (CBIA, 2020).

is not on a continual downward trend in its economic performance.

For example, Connecticut’s close proximity to New York might encourage residents to migrate from New York to Connecticut, thus increasing tax revenues for Connecticut from the employed workers who relocate.

All panelists agreed or somewhat agreed that Connecticut does not have significant sectors of high productivity (i.e., IT intensive fields) to catalyze recovery. The experts say that Connecticut’s job creation has not been on an upwards trend for a long time and has not made substantial plans to attract growth industries like clean energy and information technology. Because there was no upward trend to begin with, the shock of the shutdown is unlikely to stimulate growth for Connecticut.

1. Unemployment Rate

Experts also note that a vaccine will likely have the biggest positive impact to the economy of the nation, as well as for Connecticut.

No single dataset will illustrate the entire story of this state, and expert’s predictions were based on several key performance indicators. To continue to assess the performance of Connecticut’s economy over the next 12 months, panelists suggest analyzing these four datasets:

2. New Business Development 3. Income Tax Receipts 4. Net Migration

The consensus of the experts describes the probable factors that are, and will continue to, extend the length of the recovery for Connecticut’s economy. But, there are also reasons why Connecticut

Hannah Providence ’21 Major: B.A. Economics, Minor in Professional and Technical Writing Hometown: New Haven, CT

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OPINION

HEALTHCARE COSTS IN THE UNITED STATES

By Kevin Suprono

T

he Milliman Medical Index (MMI) measures the average healthcare cost and change in healthcare cost per year for a “typical American family of four.” Although not an economic index, the Milliman Medical Index can indicate an increase or decrease in the cost of health insurance per year, which includes cost, growth, and allocation of resources. The MMI places a focus on five components of spending, including inpatient, outpatient, physician, pharmacy, and others, as well as the relative proportions of medical costs. The MMI will be utilized in this article to determine which components have increased in cost and which factors have decreased in cost within the Affordable Care Act Era circa 2011 to the Present Day.

Figure 19: Five Components of Spending Costs

The data are determined through the use of an average employer-sponsored PPO health benefits program as an insurance plan to base costs from. A Preferred Provider Organization (PPO) health plan is a private healthcare plan that provides maximum benefits if one visits a physician or provider covered in the plan, but provides some coverage for non-plan physicians. The data for 2019 and 2020 are trends based on 2018 data; therefore, they have not reported values, whereas the 2011 through 2018 data are real data. For those specific data projections by the index, there will be accompanying analysis to assist in the comprehension of the trends in the Milliman Medical Index’s 2019 and 2020 projections.

According to Figure 19, the annual medical cost for a family of four has steadily increased since 2011, setting an increasing trend for healthcare costs for families. Further examination of the five components of spending reveals that, from 2011 to 2018, inpatient costs increased by 42%, outpatient costs increased by 59%, professional services costs increased by 30%, pharmacy costs increased by 72%, and others increased by 34%. In the year 2019, a projected dramatic decrease in the costs of all five components occurs by an estimated average of 78% while the average medical cost per family did not exhibit such a dip. This projection could be attributed to government health insurance plans, including individuals with preexisting conditions, while private health insurance companies have minimal incentive to insure those with preexisting conditions. Not being able

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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2021

to afford the penalty, many individuals who could not afford private insurance or the penalty may elect to take the government health insurance, thus decreasing costs altogether with the decrease in risk and subsequent payouts to those insured.

Included in the MMI and displayed in Figure 20 are the relative proportions of medical costs, specifically employee contribution, employer contribution, and employee out-of-pocket. In 2020, the employee contribution cost was $1,598, the employer contribution cost was $3,907, and the employee out-of-pocket cost was $1,048 which has increased by an aggregate average of 67% from the year 2011. Of the three types of costs, the employer contribution cost was the highest. As demonstrated in Figure 20, from 2011 to 2020, the employee contribution cost and employee out-of-pocket cost together were 42% of the total of the three costs, while employer contribution cost was 58% of the total cost. Under the PPO plan that is used as the benchmark for this index, employers contribute more to that plan than a high deductible consumer-direct health plan. As a result, employers bear the brunt of the contribution cost compared to employees.

An important aspect of healthcare costs is pharmaceutical costs and physician costs. From 2011 to 2018, professional services/ physician costs were an average of $7,343, and pharmacy costs

an average of $3,791. Professional services and Figure 20: Relative Proportions of Medical Costs pharmacy costs, over those eight years, increased by 31% and 72%, respectively. The pharmaceutical industry has been set on a trend of increasing drug costs. The increased costs are focused on the list price of drugs to increase rebate payments for drug companies to insurance companies and employers. As more consumers utilize services such as GoodRx, they often do not pay the full list price for drugs, which decreases drug price revenue. As a result, drug prices have increased by 72% from 2011 to 2018. Physician and professional services costs together have increased during the 2011 to 2018 period by 31%, with the current professional service cost estimated to be $1,867 and pharmacy cost estimated to be $1,321, resulting in a professional service cost decrease of 1% ($21) and pharmacy cost increase of 3% ($39).

As the United States increases in population and thousands of more Americans picking up government healthcare age, more resources are required by hospitals and physicians alike. insurance as opposed to staying with a PPO private insurance A large portion of this population who have pre-existing conditions plan once the individual mandate was removed, which resulted in require more hospital visits, use of hospital resources and technolfewer people spending money on healthcare. Employers under the ogy, and more frequent physician appointments as well as more PPO plan on which the index data is based have been responsible drug prescriptions from the pharmacies, which will increase costs for a majority of the relative proportions of medical costs due to for those entities. Thus, professional services and pharmacy costs the structure of the plan itself. With rising pharmaceutical costs, see an increase as well. the pharmaceutical industry holds a position that supports the In summary, the Milliman Medical Index has provided the necessary management of illness rather than the promotion of healthier living, data to supplement the conclusion that both the five components as the risk of lost revenue is too great. Physician costs too have of spending and the relative proportions of medical costs have increased, as insurers and the insured are required to pay more due increased at a steady pace for seven years beginning in 2011. A to increases in administrative costs. Nevertheless, healthcare costs drastic projected decrease in these costs occurred in 2019, which in the United States are increasing incrementally, as the data and could be attributed to the prescription drug trend decrease, and the analysis suggest. projected growth rate of healthcare costs dramatically decreasing. These projections for 2019 and 2020 could also be due to

www.shrm.org/resourcesandtools/hr-topics/benefits/pages/employershold-down-health-plan-costs-for-2019.aspx www.forbes.com/sites/saibala/2020/09/21/prescription-drug-andhealthcare-costs-are-rising/?sh=4693c42c367e

Kevin Suprono ’21 Major: Behavioral Economics Hometown: Wallingford, CT

www.hhs.gov/about/leadership/secretary/op-eds/why-drug-priceskeep-going-up-and-why-they-need-coming-down.html https://lamb.house.gov/media/press-releases/house-passes-bipartisanbill-lower-prescription-drug-prices#:~:text=(WASHINGTON%2C%20 DC)%20%E2%80%93%20Today,Costs%20Now%20Act%20of%202019. https://us.milliman.com/-/media/milliman/pdfs/articles/2020-millimanmedical-index.ashx

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A COLLECTION FROM THE COLLECTIVE The University of New Haven Economics Collective is an online space where faculty, students, and business industry leaders can connect and network by sharing content, whether it be report analysis, political commentary, or anything else on their mind.

Members can comment on each other’s posts, creating a meaningful and enriching dialogue that extends beyond the traditional classroom educational experience. In the Collective, all members are economists, whether the poster is a freshman student or a Nobel Prize winner. The lines of stature are blurred through the medium of the internet, leading to more thoughtful and genuine discussions. These moments of connectivity construct social capital, which helps build up the Economics Department as more than an office of the University of New Haven, rather making it a community of people who care for one another beyond the academic setting. The Collective has already been used as a method of surveying and will be used as such in the future to further employ the method of using the wisdom of crowds.

The following titles are just a glimpse of content shared on the collective. Visit the Collective at http://unheconomicscollective.ning.com.

New Year, New Semester, Same Old Story David Sacco, January 22, 2021 https://unheconomicscollective.ning.com/blog/new-year-newsemester-same-old-story

The Current COVID-19 Vaccine Roll-Out Doesn’t Make Sense David Sacco, December 18, 2020 https://unheconomicscollective.ning.com/blog/the-current-covid19-vaccine-roll-out-doesn-t-make-sense

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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2021

Americans Wait for 2nd Stimulus Check: Here’s How It Could Impact the Economy Rosina Catapano Tobias, December 1, 2020 https://unheconomicscollective.ning.com/blog/americans-waitfor-2nd-stimulus-check-here-s-how-it-could-impact-

Electronic Supply Chains to Stay Put in China, in Spite of Pressure From Tariffs Albert Messana, November 8, 2020 https://unheconomicscollective.ning.com/blog/electronic-supplychains-to-stay-put-in-china-in-spite-of-pressur

The Future of Trade and Investment : A Call to Prevent Economic Fragmentation Paarshva Nahar, November 8, 2020 https://unheconomicscollective.ning.com/blog/the-future-oftrade-and-investment-a-call-to-prevent-economic-fra

ABOUT THE NEW HAVEN ECONOMIC PERFORMANCE LABORATORY The Connecticut Economic Activity Report is a publication of the Department of Economics and Business Analytics, Pompea College of Business, University of New Haven, 300 Boston Post Road, West Haven, CT 06516. www.universityofnewhaveneconlab.org

Research Staff Estanislao Desseno ’21

Michael Pergola ’21

Matthew Liscio ’21

Hannah Providence ’21

Kyle Longo ’21

Kevin Suprono ’21

Sean Patrick ’21

Supervising Faculty and Research Directors Esin Cakan, Ph.D., Professor Claude Chereau, Ph.D., Practitioner-in-Residence Patrick Gourley, Ph.D., Assistant Professor Brian A. Marks, J.D., Ph.D., Senior Lecturer and Executive Director, Entrepreneurship and Innovation Program A. E. Rodriguez, Ph.D., Professor Kamal Upadhyaya, Ph.D., Professor

Administrative and Editorial Staff Esin Cakan, Ph.D., Professor Michael Driscoll, MBA, Managing Editor

The research staff are upper-class students in the Department of Economics and Business Analytics. Although all students work under the auspices of the supervising faculty and research directors, each student is individually responsible for interpreting and analyzing the data. The Laboratory is a teaching space, and this report is a product of that space. In addition, staff members work closely with the University of New Haven Economic Collective (http://unheconomicscollective.ning.com), which brings together students, faculty, alumni, and members of the broader community to foster a meaningful and relevant exchange of ideas. A fundamental focus of the Laboratory is to formulate, construct, and examine nontraditional socioeconomic metrics applicable to the southern region of Connecticut by employing traditional empirical methods as well as data and text-mining methods.

The Connecticut Economic Performance Laboratory is affiliated with the University of New Haven Department of Economics and Business Analytics. Any opinions contained herein do not reflect the opinion of the University of New Haven or its Pompea College of Business. The Laboratory and the printing of the report are funded by the Pompea College of Business, the Pompea College of Business Advisory Board, and other sponsors of the Laboratory.

If you are interested in supporting this student initiative, please contact Ms. Kimberly Williams, Director of Development, University of New Haven, at kpwilliams@newhaven.edu or +1.203.923.7143.

Brian A. Marks, J.D., Ph.D., Senior Lecturer and Executive Director, Entrepreneurship and Innovation Program A.E. Rodriguez, Ph.D., Chair, Department of Economics and Business Analytics

For inquiries or questions about the Connecticut Economic Activity Report, contact: Michael Driscoll, Managing Editor mdriscoll@newhaven.edu

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About the University of New Haven The University of New Haven, founded on the Yale campus in 1920, is a private, coeducational university situated on the coast of southern New England. It’s a diverse and vibrant community of more than 7,000 students with campuses across the country and around the world.

Within our colleges and schools, students immerse themselves in a transformative, career-focused education across the liberal arts and sciences, fine arts, business, healthcare and health sciences, engineering, public safety, and public service. More than 100 academic programs are offered, all grounded in a long-standing commitment to collaborative, interdisciplinary, project-based learning.

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