CT workers earn more before vacation – but extra pay matches inflation, data shows

After 18 months of drastic fluctuations in income during the COVID-19 pandemic, the average Connecticut worker has headed into the holiday shopping season of 2021 with more to spend – but with paychecks that don’t stretch not that far amid the higher prices for many items.

The Bureau of Economic Analysis calculated personal income in Connecticut at $ 83,000 per capita in the third quarter of this year. While this represented an increase of over $ 7,000 from two years ago for an increase of almost 10%, the BEA used a much smaller estimate of Connecticut’s population than the official US Census figure. Office. Including the census estimate, personal income in Connecticut would be up about 8% from the third quarter of 2019.

However, households are bracing for further price increases over the coming year. The median response in a consumer survey from the Federal Reserve Bank of New York was for a 6 percent increase in inflation over the next 12 months.

Deposits in Connecticut banks hit an all-time high this fall, according to a separate report from the Federal Deposit Insurance Corp., with households and businesses spending an additional $ 2.2 billion over three months to raise bank deposits to $ 114.8 billion.

Speaking at an economic summit in Hartford in early December, the Connecticut Department of Economic and Community Development commissioner said people and paychecks go hand in hand to boost economic momentum.

“We certainly want high growth, high productivity jobs – but we need more people to do this work to really grow the economy,” said David Lehman, DECD Commissioner.

The BEA’s third-quarter estimates were the first since the start of the pandemic that were mostly in line with historic quarterly standards. Over the past five quarters, numbers have alternately cratered and increased amid massive business closings and reopenings, and the timing of federal pandemic aid to families and businesses.

In the new normal between July and September, Connecticut’s personal income gains were in the middle of the pack nationally with 2.1% growth from the previous three months. Kentucky led the country with 6.7% third-quarter revenue growth, with New Jersey in the northeast peaking at 4.4%. New York has fallen behind with just 1.3% growth in personal income statewide.

Connecticut remains below its pre-pandemic employment numbers, even though there are plenty of job postings some employers are scrambling for despite rising wages and benefits to attract applicants. If job demand is any indicator of economic dynamics, too many people are still struggling to make ends meet, according to Paul Romer, Nobel Prize winner and professor of economics at New York University.

“We have really failed in this very massive stimulus endeavor that we have had in recent years because it has not put enough people back to work,” Romer said, speaking at the DECD summit in early December. “If we don’t turn the situation around, I don’t see how we can maintain a social fabric where everyone participates, everyone has social ties, everyone feels a certain dignity and a certain value in what they are. do.”

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