Even with Connecticut”™s unemployment rate still the highest it”™s been in nearly six years, and a population watching nervously as the number of Covid-19 cases continue to climb, John Traynor remains an optimist.
“Good ideas can come out of this,” the People”™s United Bank executive vice president and chief investment officer told the Greenwich Chamber of Commerce at its annual meeting on Nov. 19. “And Greenwich is primed.”
“Over the next couple of years, we think we”™ll be moving back to a virtuous cycle,” he said, referring to a period of rising productivity, decreasing unemployment and high growth. “We”™re already starting to see the signs.”
Although the job numbers are still “a little bit dispiriting” ”“ in October the state recorded an unemployment rate of 6.1%, an improvement over previous months but also the highest it has been since January 2015 ”“ and colder weather will have a negative effect on the restaurant sector, Traynor said, “We think we”™re on the right path.”
While he lauded the country”™s encouraging growth in payroll and employment in October, he warned that the figures mask the plight of low-wage workers, typically engaged in the service industries, who have been particularly hit hard.
According to the U.S. Labor Department, the number of long-term unemployed ”“ people who have not held a regular job for at least 27 weeks ”“ grew by 1.2 million to 3.6 million in October.
Even so, Traynor said an “explosion” of new business formations ”“ “People are working from home, and thinking it might be a good time to finally get that space on Main Street” ”“ is an encouraging sign. “In adversity, there are opportunities,” he said.
As further evidence, the People”™s United executive said that negative U.S. and global growth this year has been moderating faster than previously thought, with U.S. third quarter GDP up by 33.1% versus a decline of 31.4% in the second quarter. And, while the International Monetary Fund had earlier estimated that U.S. GDP would decline by 6.1% in 2020, its current estimate is now -4.4%.
Further, the IMF foresees a 3.7% GDP growth in 2021 ”“ depending on whether another $1 trillion stimulus bill arrives from Congress. Should the federal government come through with $2 trillion, he said, the GDP could grow by around 5%.
For all the local hoopla about people and businesses leaving New York in favor of Connecticut, Traynor said, “If New York doesn”™t do well, Greenwich and Fairfield County are not going to do well.
“Don”™t be fooled” by the bullish real estate market that has come in the wake of Covid, he advised. “The cities will still be a magnet for people to come here.”
As evidence, he noted that Amazon ”“ famously bounced in 2019 from its plans to build a second headquarters in Long Island City ”“ has instead spent $1.15 billion for the former Lord & Taylor building on 5th Avenue. It plans to hire some 2,000 engineers at the site.
More recently, Facebook announced it is leasing all 730,000 square feet at the James A. Farley Building, formerly the main post office at Penn Station, and is hiring about 8,500 people to work there, mostly in software. “Greenwich and Connecticut are going to benefit from that,” Traynor said, with both companies”™ smaller suppliers and employees likely to move here.
Traynor further said that immigration, which became a deeply divisive issue under the Trump regime, will likely be smoothed out by the administration of President-elect Joe Biden.
“That”™s a big issue for Greenwich and Connecticut,” he said. “For us to be a successful part of that cluster, we need smart people to come here to learn ”“ and we need those smart people to stay here and work.”
The “cluster” he referred to was the New York-Boston “knowledge cluster,” which Traynor defined as gatherings of human and investment capital, R&D labs and educational institutions.
“We believe the Biden administration will be more open to adding more immigrants,” Traynor added.
However, he said, “We believe that divided government will actually lead to better government,” an allusion to the two U.S. Senate races in Georgia, which will both hold runoff elections in January. Should both be won by the Democrats, that party would have a majority in the Senate, but Traynor posited that that would not occur.
Ultimately, Traynor said he “might be a little Pollyannaish, but I”™m very positive on Connecticut and the Northeast.”
