Fed's Powell heads to Connecticut, Rhode Island as region's economy sags

Powell will visit two New England states on Monday

Federal Reserve Chairman Jerome Powell is making his way through part of New England on Monday, meeting with local leaders in Rhode Island and Connecticut amid sluggish growth in the region’s economy.

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The head of the U.S. central bank, alongside Boston Federal Reserve President Eric Rosengren, will meet with leaders of East Hartford CONNects, a grant-funded initiative led by the Boston Fed that’s intended to combat poverty by connecting residents with education, job training and long-term, sustaining careers. Afterward, Powell will go to Rhode Island to deliver a speech at the Greater Providence Chamber of Commerce.

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In the second quarter of the year, Connecticut’s economy slowed, growing by just 1 percent -- half that of the overall U.S. GDP. It ranked 47th among the states, according to U.S. Commerce Department figures released at the beginning of November.

Federal Reserve Board Chair Jerome Powell testifies on the economic outlook, on Capitol Hill in Washington, Wednesday, Nov. 13, 2019. (AP Photo/Jose Luis Magana)

Rhode Island’s economy fared slightly better at 1.5 percent but still ranked 35th.

It’s a trend pervasive across New England, with only one state not falling in the bottom 15 of economic growth: Maine, at 0.6 percent, was 49th; Vermont, at 1.3 percent, was 37th; New Hampshire, at 1.4 percent, was 36th; and Massachusetts, at 1.5 percent, was 34rd. 

Connecticut’s anemic growth was tied to a slide of more than a quarter percentage point in the construction industry, which was among the weakest sectors. Across the state, the number of available construction jobs rose slightly to 57,700 in October, down from 62,100 at the start of the year, according to the state’s Department of Labor.

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Still, like most of the U.S., the state is steadily creating jobs -- in October, the state’s economy added 4,800 -- while unemployment fell to 3.6 percent, down 0.2 percent from the year-ago period.

Economic growth has become a powerful political issue in Connecticut, with some businesses and Republicans criticizing the Democrats, who hold a majority, of raising taxes and imposing regulations that kill growth and slow job creation.

Powell's presence in the states comes ahead of the upcoming Federal Open Market Committee meeting in mid-December, during which policymakers at the Federal Reserve are widely expected to leave interest rates unchanged on the basis that the economy is growing at a healthy pace, despite some potential roadblocks, such as the U.S.-China trade war.

“Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely,” Powell said while testifying before Congress this month. “This favorable baseline partly reflects the policy adjustments that we have made to provide support for the economy.”

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