The Backyard Economy: Connecticut

Connecticut might be the richest state in the country, but it doesn't mean that everything is rosy.

"Connecticut is of course very wealthy, so if you look at it in terms of what it is on average, it looks very pretty good. If you look at any of the trend lines, it looks somewhere between anemic and downright sick," said Fred Carstensen, director of the Center for Economic Analysis at University of Connecticut.

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The state faces long-term problems of job growth, education and luring businesses to the state.

"The problems in Connecticut are really long term," Carstensen said. "For years, the state has been replacing higher salary jobs with lower wage jobs."

Carstensen said the state is in a recession, but it all depends on where you live.

Those in Fairfield County, closest to New York City, are seeing continued job growth in the financial services sector despite troubles on Wall Street.

"That's the area that clearly has been the healthiest and continues to be the healthiest," Carstensen said. The New Haven area has also seen growth, thanks to investments from Yale University.

But elsewhere in the state, things are not as good. The cities of Hartford and Waterbury continue to suffer as do the state's rural regions.

Eastern Connecticut has suffered from the continued shrinking of submarine maker Electric Boat but has seen some benefit from the continual growth of megacasinos Foxwoods and Mohegan Sun.

"Absent the casinos the area would be in pretty desperate shape," Carstensen said.

The insurance and aerospace industries also have a large foothold in Connecticut, with conglomerate United Technologies being the state's largest employer. Both sectors "are holding their own jobwise," according to Moody's

Connecticut should do better than the rest of the country in the current downturn, said, but will take longer to grow when the economy recovers because of high energy costs and a high cost of living.