It was a development few prognosticators saw coming at the onset of the COVID-19 pandemic: The federal government propped up states with a flood of relief and stimulus funding, leaving the Connecticut state budget free of deficits without cutting jobs and services. After public health concerns dominated 2020, this year saw Connecticut\u2019s economic recovery take center stage. Vaccinations emboldened employers to hire back workers. By summer, many were running up against a labor shortage that overtime and hiring bonuses only dented. The official unemployment rate stood at 6 percent in November but the state was on the cusp of weekly benefit claims dropping below their levels in the weeks prior to March 2020, when Gov. Ned Lamont shut down much of the state. Still, the Connecticut economy remains 74,000 jobs short of the nearly 1.7 million it had in November 2019. The state Department of Labor paid out more than $10 billion in unemployment assistance and businesses paid employees another $4 billion through the U.S. Department of the Treasury\u2019s Paycheck Protection Program that awarded forgivable loans for those that didn\u2019t lay off workers. Those programs, along with stimulus checks to families and other pandemic aid, helped Connecticut keep up tax revenue with extra to spare. Hard-charging markets \u2014 the Standard & Poor\u2019s 500 is up 28 percent for the year \u2014 added yet more revenue. The result: This year the state added an extra $1.6 billion to the pension funds and still maintained its \u201crainy day\u201d fund at roughly $3 billion. But speaking in early December at an economic summit in Hartford sponsored by the Department of Economic and Community Development, Lamont described Connecticut\u2019s surpluses as \u201corganic\u201d that can be sustained whenever federal pandemic assistance fades. \u201cChronic fiscal crisis, lurching from deficit to deficit \u2014 enough already,\u201d Lamont said. \u201cWe have a long way to go \u2014 I\u2019m not putting up the \u2018mission accomplished\u2019 banner, but I want you to know we have made extraordinary progress.\u201d Connecticut\u2019s gains were seen in many areas in 2021, from real estate sales continuing to thrive, more companies moving to the state, the revitalization of downtown districts, legalization of recreational marijuana and the launch of sports betting. Job creation and income gains both trail the nation, however, presenting the usual challenges. As the year comes to a close, Hearst CTInsider looks back at some of the biggest business and economic stories of 2021. Home sales build on suburban flight Few expected this year\u2019s housing market to top the 2020 pandemic stampede \u2014 but over the first 11 months of this year, Connecticut home sales were up 4.8 percent to nearly 50,000 homes sold, according to Berkshire Hathaway HomeServices New England Properties. Homeowners continued to cash out during a historic market, selling at prices they could not have obtained without the median home price rising 12 percent. That put the squeeze on would-be buyers who saw their \u201cbest-and-final\u201d offers beat out repeatedly. For those resigned to another year of apartment living, many absorbed rent hikes. Dawn of sports wagering in Connecticut On Sept. 30 at Mohegan Sun, Lamont bet $50 on the Connecticut Sun to beat the Chicago Sky, launching sports wagering in Connecticut. The Sun won and Connecticut aims to as well with sports gambling and online casino games generating $4 million in state revenue in November, the first full month. Fantasy giants DraftKings and FanDuel paired with Foxwoods and Mohegan Sun, with SugarHouse and the Connecticut Lottery to also get in on the action. Connecticut receives 13.75 percent of revenue on sports bets, and 18 percent for online casino games, but nothing for sports wagers placed at Foxwoods and Mohegan Sun. Stamford draws new corporate employers Five years after General Electric moved its headquarters out of Connecticut, the state is seeing renewed appeal as a corporate destination during the COVID-19 pandemic. In June, tobacco giant Philip Morris International announced it would move its headquarters to Stamford from New York City. Other New York transplants include industrial systems manufacturer ITT and cryptocurrency innovator Digital Currency Group. A decade after moving to Stamford, meanwhile, Charter Communications got the keys to its new headquarters complex there. This year, new U.S. Census Bureau data showed that Stamford overtook New Haven to become the state\u2019s second-largest city. Supply chain crisis and inflation As Cindi Bigelow said during the DECD summit in December, when an Asian supplier demanded $1 million to cover the cost of shipping a key ingredient for Bigelow Tea across the Pacific Ocean, she had no choice but to sign the check. With aerial photos in July showing dozens of ships waiting to enter California ports, the supply-chain crisis cascaded through the Connecticut economy for the remainder of the summer and fall, with sporadic shortages for some goods and prices rising on everything from food to building supplies. As Bigelow showed, that\u2019s tied to the bout of inflation that could but a damper on growth in 2022. Entering 2022, labor shortages remain acute for key jobs like truck drivers to deliver products. Downtown districts reinvigorated In the second year of pandemic uncertainty, one unexpected beneficiary emerged \u2014 Connecticut\u2019s downtown commercial districts, which had endured an extended stretch of malaise as shoppers turned to Amazon. Many storefronts are full for the 2021 holiday shopping season, and if malls continue to grapple with empty anchor pads once occupied by Lord & Taylor, Sears and other historic brands, they are developing alternatives for entertainment and apartments. While towns are peppered with plenty of options for dining out these days, the sector continues to struggle, according to the Connecticut Restaurant Association, with receipts having yet to bounce back to pre-pandemic levels. Bank mergers hit Bridgeport, Waterbury Some locales lost out. It was the phone call that prompted nearly 750 job cuts in Connecticut, when M&T Bank\u2019s CEO checked in with his People\u2019s United Bank counterpart Jack Barnes about a takeover. Within two months, the executives had a $7.6 billion deal in place. With the vast majority of job cuts hitting the Bridgeport headquarters of People\u2019s United, Bridgeport Mayor Joe Ganim vowed to close the city\u2019s accounts with the company. In a separate deal, Webster Bank chose Stamford as its new headquarters having long been based in Waterbury, after its own $10 billion merger with Sterling National Bank. Sunset for pandemic assistance Sept. 4 \u2014 it was the date tens of thousands of Connecticut residents had circled on their calendars, when a $300 weekly boost for unemployment compensation reached its sunset as well as jobless aid for self-employed workers. Thousands of Connecticut employers had the date circled as well, in hopes that the expiration of benefits would prompt more people to apply for available jobs. While a number of pandemic aid programs continue into 2022 \u2014 including UniteCT, providing rent and utilities assistance, and the Homeowner Assistance Fund, providing mortgage relief \u2014 the expectation by labor departments is for people to resume working for a living. Legalizing recreational marijuana Nine years after Colorado and Washington became the first states to legalize recreational use of marijuana and Connecticut allowed for medicinal use of the substance, Lamont signed Connecticut\u2019s new law, which took effect in July and allows for limited possession of pot. Retail sales will not commence until 2022, with the Connecticut law creating a \u201cSocial Equity Council\u201d to ensure that underserved communities get a larger share of business licenses. The new law also has companies updating their employee handbooks to address possession and use. Judge rejects Purdue plan Two years after filing for bankruptcy, OxyContin maker Purdue Pharma received a judge\u2019s approval in September for a proposed settlement \u2014 only for a U.S. District Court judge to reject the deal in December. The $10 billion settlement would have ended several thousand lawsuits alleging the firm\u2019s marketing fueled the deadly opioid crisis. Connecticut Attorney General William Tong and others nationally opposed a stipulation that would have released Purdue\u2019s controlling Sackler family from further legal liability. Separately in July, Tong announced Connecticut would get $300 million in settlement funds from opioid distributors AmerisourceBergen, Cardinal Health and McKesson, and drugmaker Johnson & Johnson. Transportation repairs, expansion With President Joe Biden signing the American Rescue Plan in March, Connecticut will receive nearly $475 million in assistance for its public transit system, which saw ridership drop dramatically during the COVID-19 pandemic. And with tolls dead politically, the state looked at other revenue sources, including a truck tax that will raise $90 million a year. Meanwhile, Bradley International Airport and Tweed New Haven Airport continued to add destinations as an alternative to Connecticut travelers who otherwise must battle traffic to the metropolitan New York City area\u2019s major airports. Wheels turning on renewable energy Entering 2021, Connecticut pledged support for a New England-wide Transportation and Climate Initiative that would have required fuel companies to purchase emission allowances that could be recovered by higher prices at the pump. But Connecticut lawmakers refused to vote on TCI despite intensifying weather disasters. Lamont instead issued an executive order for state agencies to curb energy use, and by extension, emissions. The state\u2019s two largest utilities are moving ahead with their own initiatives, with Avangrid and Eversource planning offshore wind farms and Avangrid planning to run transmission lines through Maine from hydropower dams in Canada. Utilities pay for storm lapses Eversource and Avangrid accepted penalties from the Connecticut Public Utilities Regulatory Authority over their preparation and response to Tropical Storm Isaias, which knocked out power statewide for extended stretches in August 2020, on the heels of a heat wave that radiated into monthly bills. Additionally, Eversource agreed to provide more than $100 million in customer credits and assistance for those behind on their bills. The decisions came on the heels of a \u201ctake back the grid\u201d law that allows PURA to force the utilities to cover the cost of spoiled food and medicine for preventable outages lasting four days or more. Includes reporting by Dan Haar, Ginny Monk, Paul Schott, Luther Turmelle, Julia Bergman, Ver\u00f3nica Del Valle, Ken Dixon, Brianna Gurciullo, Liz Hardaway, John Moritz and Nicholas Rondinone.