August Jobs Report: Record Losses

Based on today’s news, August was Connecticut’s worst month for job losses in 36 years. The state reported a record 6,800 lost jobs, while the unemployment rate jumped a historic five-tenths of a point to nine percent.
The state Department of Labor also revised down its July numbers by 1,600 jobs, reporting a gain of 3,500 jobs for that month. The state’s employers have added just 1,100 positions since August 2011.
Nonetheless, confusion and skepticism punctuated analysis of the report for a second consecutive month, with the labor agency again hosting a media conference in an attempt to explain seemingly contradictory data.
“We can’t find any corroborating economic evidence that the record losses in employment and increases in unemployment, indicated by the household survey, are occurring at this magnitude,” said the agency’s research director, Andy Condon.
Real numbers?
A reporter asked Condon whether the August employment numbers and the Bureau of Labor Statistics household survey, which reports the unemployment rate, were real.
“We’re trying to find a reason for this. We’re not at a point where we’re saying the numbers are not real, ” he said. “We are seeing a softening in economic growth.”
CBIA economist Pete Gioia said while the report was disappointing, there was enough contradictory information that further revisions were possible in subsequent reports.
“I think the report is a warning sign that efforts to create jobs need to be redoubled and be priority number one,” he said.
Skepticism
Governor Dannel Malloy was skeptical about today’s reported numbers, as he was last month when the Department of Labor reported thousands of new jobs and a jump in unemployment.
“We haven’t seen an increase in the initial number of people filing for unemployment benefits,” he said in a statement.
“In fact, claims are down from this time last year. And tax withholdings are up 3.6 percent after adjustment. Those two trends are the opposite of what you would expect to see if the state was losing jobs at the rate suggested in this report.
“However, I am well aware that we continue to battle strong headwinds at the national and international levels. We’ve also recently learned that the recession was far worse than we thought and had a far deeper impact than we understood at the time.”
Slow growth
August was the fourth month of the calendar year with job declines. The first eight months of 2012 produced a net 1,300 new jobs, well behind last year’s pace of 8,000 positions through August.
Connecticut has recovered 30,100, or just over 25 percent, of the jobs lost during the March 2008-February 2010 economic recession.
The private sector regained 40,400 (36.7%) of the 110,200 private jobs lost during that period. Financial activities, other services, government, and construction continued to lose jobs even after the recovery began in February 2010.
The current job recovery high point in Connecticut (1,634,900) was reached in February 2012.