News From Kevin Lembo



Comptroller Kevin Lembo today, in his monthly financial and economic update, projected a General Fund surplus of $266.6 million for Fiscal Year 2022 while warning of the consequences the recent fight in Congress over a spending plan and a default on federal loans.

Connecticut’s economy continues its path to recovery, Lembo said. New unemployment claims have decreased sharply from this time a year ago and the state has experienced eight consecutive months of job growth, recovering 68.9 percent of the jobs lost during the height of the pandemic. Yet, Lembo cited warning signs nationally that could threaten progress, including slow job growth, supply chain shortages, waning consumer confidence and brinksmanship in Congress.

“The current actions in Congress risk having a deleterious effect on the economy and, if members fail to raise the debt ceiling, could be debilitating,” Lembo said. “While I’m pleased that a shutdown of the federal government has been avoided, this politically motivated brinksmanship is adding unnecessary volatility to the economy, having a chilling effect on consumer confidence and imposing preventable harm on American workers. Every member of Congress should act responsibly and resolve these issues before they transform from a partisan disagreement to a financial catastrophe. It’s irresponsible to hold the American economy hostage for political gain and I hope everyone will come to their senses.”

Nationally, consumer confidence has dipped for the third consecutive month. Job gains in August also underperformed expectations. Lembo noted, however, that the economic recovery from the pandemic has been erratic and can change rapidly. As an example, the stock market had a volatile quarter in response to the delta variant, debt ceiling alarms, and inflation fears.

In a letter to Governor Ned Lamont, Lembo noted that the underlying trends in Connecticut have the state well-positioned. While it remains quite early in the fiscal year, the state’s revenues and expenditures are currently close to the adopted budget plan. Lembo’s surplus projection differs slightly from one issued by the Office of Policy and Management earlier this month due to an anticipated increase in adjudicated claims in the SEBAC v. Rowland settlement.

Lembo noted that Connecticut’s housing market remains strong, with sale prices of single-family homes continuing to rise. However, high prices and a lack of inventory has begun to drive down overall sales numbers and continues to squeeze would-be first-time homebuyers out of the market. Rental costs in Connecticut have increased 12.4 percent this year and, with the expiration of national and state eviction moratoriums, there is a growing concern about homelessness and housing insecurity.

“Policymakers in Connecticut are treating this issue with the necessary urgency and are now utilizing resources to help people stay in their homes,” said Lembo. “Avoiding large-scale housing insecurity will be critical in getting our state economy moving again and combatting the effects of the pandemic.”

[Click for recent economic indicators and trends from national and state sources]



Comptroller's Office Contact:
Tyler Van Buren

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