August Jobs Report: Supply, Demand Gap Widens

Connecticut’s labor market declined for an eighth consecutive month in August as job openings increased again, expanding the troubling mismatch between supply and demand.

The population of those working and looking for work is at the lowest level in five years, falling by 4,100 people last month, bringing 12-month declines to 54,000 (-2.8%).

Payroll job growth fell by 300—breaking a five-month growth streak—with gains in the trade, transportation, and utilities sector offsetting losses in professional services, information, and manufacturing.

Total employment—which includes nonfarm payrolls, independent contractors, and the self-employed—fell for an eighth month and is at its lowest non-pandemic level since 2014.

Unemployment fell one-tenth of a point to 5.1%—a percentage point above the national rate—with 18,000 more people unemployed than in August 2025.

Job openings increased by 4,552 positions (5.6%) to 86,238 last month, representing opportunities across all industry sectors and occupations and highlighting the hiring challenges faced by employers.

‘People Crisis’

The Department of Labor’s monthly employment report shows that total employment dropped by 72,400 in the last 12 months, the biggest single-year decline in 50 years, excluding the COVID-19 pandemic.

And the gap between Connecticut’s unemployment rate and the national rate of 4.1% remains at its widest point since the pandemic. 

CBIA president and CEO Chris DiPentima called the lack of available workers “the most significant obstacle facing Connecticut’s economy.”

“This is not a jobs crisis in the traditional sense—this is a people crisis,” DiPentima said.

“Poll after poll—including the CBIA Foundation’s consumer outlook survey, released last week—show that the state’s high cost of living is the top concern for voters of all political stripes and persuasion. 

“Too many working families say the cost of housing, healthcare, energy, and childcare makes it harder every year to make Connecticut work for them. 

“Candidates for elected office must focus on policy solutions that will make it easier for families to stay in Connecticut and build their lives and easier for businesses to hire, grow, and keep good jobs here.” 

Structural Trends

As of August, Connecticut’s labor force is 54,500 people below pre-pandemic levels (-2.8%)—in sharp contrast with the national average, up 3.2% over the same period.

Massachusetts has the region’s strongest post-pandemic labor force growth (1.7%), followed by Rhode Island (0.5%), Maine (0.1%), New Hampshire (0%), Connecticut, and Vermont (-3.8%).

Twelve months ago, Connecticut’s unemployment rate was 4.9%, the lowest in the region. It’s now the highest of the New England states and tied for highest in the country.

Vermont has the region’s lowest unemployment (2.6%), followed by New Hampshire (2.8%), Maine (3.2%), Rhode Island (3.7%), Massachusetts (4.3%), and Connecticut.

Connecticut’s labor participation rate fell two-tenths of a point to 62% last month, 25th in the country and down two percentage points since August 2025.

Massachusetts has the region’s highest labor participation rate (65.3%), followed by New Hampshire (64.8%), Rhode Island (62.1%), Vermont (62.1%), Connecticut, and Maine (58.6%).

The national rate is 61.6%.

Industry Sectors, Labor Markets

Four of the state’s 10 major industry sectors posted job gains in August, led by trade, transportation, and utilities, which added 1,100 positions (0.4%), bringing 12-month gains to 700 (0.2%).

Other services added 400 jobs (0.6%), 2,300 above August 2025 levels (3.6%).

Construction added 400 jobs (0.6%), bringing 12-month gains to 2,400 (3.7%), with employment in education and health services growing by 200 (0.1%)—9,100 higher than a a year ago (2.4%).

Professional and business services posted the largest losses of any sector in August, shedding 700 jobs (-0.3%), reducing 12-month gains to 2,200 (1%).

Employment in the information sector declined by 500 (-1.6%), with year-over-year losses at 100 jobs (-0.3%).

Manufacturing broke a seven-month string of gains, losing 400 jobs (-0.3%) in August and dropping 12-month gains to 4,500 (3%).

The government sector, which includes state, local, and federal government entities and the tribal casinos, lost 400 jobs in August (-0.2%).

Financial activities lost 200 jobs (-0.2%) last month, with 12-month losses at 2,500 (-2.1%), the worst of any sector.

Leisure and hospitality employment declined by 200 positions (-0.1%) and is down 1,900 (-1.2%) since August 2025.

Norwich-New London-Willimantic was the only one of the state’s major labor market areas to add jobs in August, gaining 200 positions (0.2%).

Hartford-West Hartford-East Hartford lost 400 jobs last month (-0.1%), followed by Waterbury-Shelton (-200; -0.1%), New Haven (-200; -0.1%), and Bridgeport-Stamford-Danbury (-100; -0.02%).