State Economic Forecast – TD Economics

Economic Outlook Report: U.S. Regional Analysis with Emphasis on Sustainable Development Goals (SDGs)

Connecticut: Economic Slowdown Amid Trade Uncertainty

Connecticut’s economy shows early signs of cyclical slowing in 2025, with blue-collar sectors weakening due to trade uncertainty and white-collar sectors experiencing indirect effects. The financial activities sector, which contributes nearly 30% of GDP, has notably slowed, raising concerns. Federal defense investments, including a $12.4 billion contract for Virginia Class submarines, provide some support. Real GDP growth is forecasted to ease to 1.2% in 2025.

Labor Market

• Unemployment rate increased by 0.5 percentage points year-to-date, currently below the national average by 0.5 points.
• Job losses concentrated in manufacturing, construction, and leisure & hospitality sectors.
• Health care job growth slowing; white-collar job growth is relatively stronger, contrary to national trends.
• Projected job growth of 0.4% in 2025.

Housing Market

• Home prices rose 5.2% in the past six months, exceeding the national average of 0.5%.
• Homebuilding activity increased initially but has since slowed.
• Price growth expected to moderate to 7.6% in 2025.

SDG Emphasis

1. SDG 8 (Decent Work and Economic Growth): Focus on sustaining employment growth, particularly in health care and defense sectors, to promote inclusive economic growth.
2. SDG 9 (Industry, Innovation, and Infrastructure): Federal investments in defense and workforce productivity aim to enhance industrial innovation and infrastructure.
3. SDG 11 (Sustainable Cities and Communities): Addressing housing supply constraints to ensure affordable and sustainable housing development.

Massachusetts: Risks from Federal Funding Cuts

Massachusetts experienced strong productivity-driven growth in early 2025, supported by technology and life sciences sectors. However, elevated interest rates and federal research funding cuts pose risks, with GDP growth forecasted at 1.5% in 2025 and 2.2% in 2026.

Labor Market

• Unemployment rate increased by 0.5 percentage points due to subdued employment gains and labor force growth.
• Immigration policy tightening expected to slow labor force growth.
• Job growth stagnation in most industries except health care, trade & transportation.
• Potential loss of up to $1.6 billion in federal research grants in 2026.

Housing Market

• Low supply keeps price growth above national average.
• Price growth expected at 3.5% in 2025, moderating in 2026.

SDG Emphasis

1. SDG 3 (Good Health and Well-being): Continued growth in health care employment supports community health.
2. SDG 4 (Quality Education): Federal funding cuts threaten education sector jobs, impacting quality education.
3. SDG 9 (Industry, Innovation, and Infrastructure): Research funding cuts may hinder innovation and scientific advancement.
4. SDG 11 (Sustainable Cities and Communities): Addressing housing affordability and supply challenges.

New England Tri-State (New Hampshire, Maine, Vermont): Tourism and Labor Market Challenges

The tri-state region faces economic slowing due to trade and tourism disruptions. GDP growth forecasts for 2025 are 1.3% (New Hampshire), 1.1% (Maine), and 1.0% (Vermont).

Labor Market

• Job openings down nearly 20% year-to-date.
• Unemployment rates expected to rise: 3.6% (Maine), 3.1% (New Hampshire), 2.7% (Vermont).
• Job growth concentrated in health care and select sectors.

Housing Market

• Supply remains tight, especially in New Hampshire.
• Price growth expected at 5.0% (New Hampshire), 3.7% (Maine), 3.6% (Vermont) in 2025.

SDG Emphasis

1. SDG 8 (Decent Work and Economic Growth): Addressing employment challenges in tourism and trade sectors.
2. SDG 11 (Sustainable Cities and Communities): Managing housing supply to support sustainable community development.
3. SDG 12 (Responsible Consumption and Production): Mitigating trade disruptions to promote sustainable economic activities.

Middle Atlantic Region (New Jersey, New York, Pennsylvania)

New Jersey: Trade Headwinds Impacting Growth

• GDP growth expected to slow to 1.3% in 2025.
• High import exposure (18.2% of GDP) makes state vulnerable to tariffs.
• Unemployment rate forecasted to rise to 4.9% in 2025.
• Job losses in most sectors except health care and education.
• Home price growth strong but expected to decelerate to 6.4% in 2025.

New York: Interest Rates Restrain Vital Sectors

• GDP growth forecasted at 1.4% in 2025.
• Job growth concentrated in health care; layoffs in tech and finance.
• Tourism slowing with a 3.0% decline in flight passengers.
• Housing prices down 1.0% year-to-date; expected growth of 2.4% in 2025.

Pennsylvania: Moderating Growth and Mixed Labor Signals

• GDP growth expected at 1.3% in 2025.
• Conflicting labor market data; moderate job growth expected.
• Job gains in health care, professional services, leisure & hospitality.
• Housing price growth at 4.4% over the past year; expected to ease.

SDG Emphasis for Middle Atlantic

1. SDG 8 (Decent Work and Economic Growth): Supporting job growth in health care and education to stabilize economies.
2. SDG 9 (Industry, Innovation, and Infrastructure): Addressing trade-related vulnerabilities to sustain industrial sectors.
3. SDG 11 (Sustainable Cities and Communities): Managing housing affordability and supply challenges.
4. SDG 12 (Responsible Consumption and Production): Mitigating trade disruptions and tariff impacts.

Upper South Atlantic (DC, Delaware, Maryland, North Carolina, Virginia, West Virginia)

DC-Maryland-Virginia (DMV): Government Sector Contraction

• Economic growth forecasted at 1.6% in 2025, below national average.
• DC’s economy heavily exposed to federal government sector, experiencing payroll declines.
• Unemployment rates rising, especially in DC (5.8%).
• Healthcare remains a growth driver; labor market still relatively tight.
• Housing prices easing but remain above national averages in Maryland and Virginia.

North Carolina: Sustained Growth with Emerging Challenges

• GDP growth expected at 1.9% in 2025.
• Strong job growth (3.3% annualized) with unemployment steady at 3.7%.
• Wage growth accelerating to 5% year-over-year.
• Significant investments in biotech and data centers creating jobs.
• Housing market cooling but building permits remain elevated.

SDG Emphasis for Upper South Atlantic

1. SDG 8 (Decent Work and Economic Growth): Promoting job creation in healthcare, biotech, and technology sectors.
2. SDG 9 (Industry, Innovation, and Infrastructure): Supporting innovation through investments in biotech and data infrastructure.
3. SDG 11 (Sustainable Cities and Communities): Encouraging sustainable housing development amid market cooling.
4. SDG 10 (Reduced Inequalities): Addressing labor market disparities and immigration impacts on workforce supply.

Lower South Atlantic (South Carolina, Georgia, Florida)

South Carolina: Diverse Economy with Trade Risks

• GDP growth forecasted at 2.1% in 2025.
• Unemployment rate decreased to 4.2%; employment growth accelerated to 2.4% year-over-year.
• Job gains across accommodation, professional services, healthcare, construction, and logistics.
• Trade exposure high; tariffs may impact logistics and manufacturing sectors.
• Housing market supported by low inventory and elevated building permits.

Georgia: Moderating Growth Amid Labor and Housing Challenges

• GDP growth expected at 1.8% in 2025.
• Unemployment steady at 3.6%; wage growth surged to 10% year-over-year.
• Domestic migration slowing; international migration expected to decline due to immigration policies.
• Housing market cooled, with apartment rents and home prices in shallow negative territory.
• Trade exposure moderate; port activity expected to decline with tariffs.

Florida: Slowing Growth but Maintaining Strength

• GDP growth forecasted at 2.0% in 2025.
• Payroll growth at 0.7%; unemployment rate rising moderately.
• Job gains in healthcare, professional services, defense, aerospace, and insurance sectors.
• Tourism and leisure sectors weakening; international visits declining sharply.
• Housing market softening, especially in condo segment; single-family prices also declining.

SDG Emphasis for Lower South Atlantic

1. SDG 8 (Decent Work and Economic Growth): Supporting diverse job creation across multiple sectors including healthcare and technology.
2. SDG 9 (Industry, Innovation, and Infrastructure): Encouraging investments in technology hubs and manufacturing expansions.
3. SDG 11 (Sustainable Cities and Communities): Addressing housing affordability and supply constraints, especially in urban areas.
4. SDG 10 (Reduced Inequalities): Managing impacts of immigration policy on labor supply and population growth.
5. SDG 12 (Responsible Consumption and Production): Mitigating trade-related disruptions to sustain economic activities.

Summary Tables

Forecast data for real GDP growth, employment changes, unemployment rates, home price changes, and population growth for 2024-2026 are available for all states and regions discussed, supporting detailed economic planning aligned with sustainable development objectives.

Disclaimer

This report is provided by TD Economics for informational and educational purposes as of June 2025. It reflects economic analysis and forecasts subject to change based on market conditions. The report emphasizes the importance of sustainable economic growth, inclusive employment, innovation, and sustainable communities in alignment with the United Nations Sustainable Development Goals (SDGs).

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 8: Decent Work and Economic Growth
   • The article discusses economic growth rates, employment changes, unemployment rates, and labor market conditions across various states, highlighting the importance of sustained economic growth and decent work opportunities.
2. SDG 9: Industry, Innovation and Infrastructure
   • References to investments in defense, technology, life sciences, manufacturing expansions, and infrastructure projects indicate a focus on building resilient infrastructure and promoting innovation.
3. SDG 11: Sustainable Cities and Communities
   • Housing market dynamics, including supply constraints, home price growth, and homebuilding activity, relate to making cities and human settlements inclusive, safe, resilient, and sustainable.
4. SDG 10: Reduced Inequalities
   • Discussion on labor force participation, immigration policy impacts, and exposure of undocumented workers touches on reducing inequalities within and among countries.
5. SDG 3: Good Health and Well-being
   • Growth and stability in the healthcare sector across states emphasize the importance of ensuring healthy lives and promoting well-being.
6. SDG 12: Responsible Consumption and Production
   • Trade uncertainties, tariffs, and their impact on manufacturing and logistics sectors relate to sustainable consumption and production patterns.

2. Specific Targets Under Identified SDGs

1. SDG 8: Decent Work and Economic Growth
   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances.
   • Target 8.5: Achieve full and productive employment and decent work for all women and men.
   • Target 8.6: Reduce the proportion of youth not in employment, education or training.
2. SDG 9: Industry, Innovation and Infrastructure
   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and GDP.
   • Target 9.5: Enhance scientific research, upgrade technological capabilities and encourage innovation.
3. SDG 11: Sustainable Cities and Communities
   • Target 11.1: Ensure access for all to adequate, safe and affordable housing and basic services.
   • Target 11.3: Enhance inclusive and sustainable urbanization and capacity for participatory, integrated and sustainable human settlement planning and management.
4. SDG 10: Reduced Inequalities
   • Target 10.2: Empower and promote the social, economic and political inclusion of all.
5. SDG 3: Good Health and Well-being
   • Target 3.8: Achieve universal health coverage, including financial risk protection and access to quality essential health-care services.
6. SDG 12: Responsible Consumption and Production
   • Target 12.2: Achieve sustainable management and efficient use of natural resources.

3. Indicators Mentioned or Implied to Measure Progress

1. Economic Growth and Employment Indicators
   • Real GDP growth rates by state and region.
   • Employment growth rates (% change).
   • Unemployment rates (average %).
   • Labor force participation rates.
2. Industry and Innovation Indicators
   • Investment amounts in manufacturing, technology, defense, and biotech sectors.
   • Number of jobs created through expansions and contracts.
   • Research and development funding levels (e.g., NIH and NSF grants).
3. Housing and Urban Development Indicators
   • Home price growth (% change over time).
   • Housing supply metrics (months’ supply of inventory, homebuilding permits).
   • Housing affordability measures.
4. Social Inclusion and Inequality Indicators
   • Labor force composition including undocumented workers’ share.
   • Immigration and migration rates affecting labor supply.
5. Health Sector Indicators
   • Job growth in healthcare sector.
   • Healthcare investments and hospital expansions.
6. Trade and Consumption Indicators
   • Import shares as a percentage of GDP.
   • Port activity and logistics sector employment.
   • Impact of tariffs on trade and related industries.

4. Table: SDGs, Targets and Indicators

SDGs	Targets	Indicators
SDG 8: Decent Work and Economic Growth	8.1: Sustain per capita economic growth. 8.5: Achieve full and productive employment. 8.6: Reduce youth not in employment, education or training.	Real GDP growth rates. Employment growth rates (% change). Unemployment rates (% average). Labor force participation rates.
SDG 9: Industry, Innovation and Infrastructure	9.2: Promote sustainable industrialization. 9.5: Enhance scientific research and innovation.	Investment amounts in manufacturing and technology sectors. Number of jobs created via expansions and contracts. R&D funding levels (NIH, NSF grants).
SDG 11: Sustainable Cities and Communities	11.1: Access to adequate, safe and affordable housing. 11.3: Sustainable urbanization and planning.	Home price growth (% change). Housing supply (months’ inventory, permits). Housing affordability metrics.
SDG 10: Reduced Inequalities	10.2: Promote social, economic, and political inclusion.	Labor force composition including undocumented workers. Immigration and migration rates.
SDG 3: Good Health and Well-being	3.8: Achieve universal health coverage and access to quality healthcare.	Healthcare sector job growth. Healthcare investments and hospital expansions.
SDG 12: Responsible Consumption and Production	12.2: Sustainable management and efficient use of natural resources.	Import share of GDP. Port activity and logistics employment. Impact of tariffs on trade and manufacturing sectors.

Source: economics.td.com