Connecticut lost 3,900 jobs in August while the state's unemployment rate fell two-tenths to 4.8%, although for discouraging reasons, a contracting labor force.

Coupled with revised July numbers—a 1,100 loss instead of the originally reported 600—the Department of Labor's August jobs report cast renewed concerns about the state's economy.

Year-Over-Year Job Growth"To put that in perspective, Massachusetts gained 10,800 jobs in August," said CBIA economist Pete Gioia.

"This is a major retreat from the positive momentum we saw earlier this year."

Connecticut saw encouraging job growth in the first quarter of 2017, followed by strong numbers in May and June.

Over the last 12 months however, the state has now added just 6,000 jobs, or 0.4% growth, well below the New England average of 1.2%.

"If the stakes weren't high enough already, these numbers just reinforce that policymakers must focus on job creation as they act on the next state budget," Gioia said.

"Connecticut desperately needs a state budget that sets the tone for positive job growth, that changes the state's direction."

Manufacturing Posts Big Gains

There were bright spots in the August jobs report, with manufacturing adding 1,200 new jobs.

Gioia said Connecticut's manufacturing sector has "tremendous upside" for the economy, driven by surging demand across a number of areas, particularly aerospace and defense.

Professional and business services was the only other sector to show growth for the month, adding 800 jobs.

We desperately need a budget that sets the tone for positive job growth, that changes the state's direction.
— CBIA's Pete Gioia
After posting strong gains in July, trade, transportation, and utilities led all losing sectors last month, shedding 1,500 positions.

Leisure and hospitality lost 1,000 jobs, followed by financial activities (-900), construction (-900), education and health services (-700), other services (-600), and government (-200).

Information was unchanged for the month.

Private Sector Loses 3,700 Jobs

Private sector employers shed 3,700 positions in August, retreating from a milestone set in June after recovering all jobs lost during the recession.

The private sector recovery rate is now 97%. Overall, Connecticut has recovered 78% of the 119,100 jobs lost in the 2008-2010 economic downturn—the slowest of any New England state.

The unemployment rate dropped from 5% to 4.8%, and remains the highest in the region.

"While our unemployment rate is down, it's down for the wrong reasons," Gioia said, noting that the state's labor force shrank by 5,600 people last month.

Bridgeport-Stamford-Norwalk was the only labor market area to post growth last month, adding 700 jobs.

Hartford-West Hartford-East Hartford lost 2,400 jobs, followed by Norwich-New London (-1,000), Waterbury (-600), New Haven (-600), and Danbury (-200).