Can State Build on May Jobs Numbers?
May brought 6,400 new jobs to Connecticut. With a special legislative session pending on the $40 billion, two-year budget, the question is this: will the state be in a position to build on those numbers?
There’s much to be concerned about says CBIA economist Pete Gioia, beginning with the $700 million in damaging business tax hikes included in the budget adopted by the House and the Senate on June 3.
While Governor Dannel Malloy later proposed rolling back about a third of those tax increases, the legislature still must agree to his proposal when it meets in special session, reportedly scheduled for June 29-30.
Gioia noted that the tax increases in the state budget have the potential to put the brakes on business investment and the modest job recovery the state has experienced so far.
“It’s absolutely critical for the state of Connecticut to pass a budget and tax package that will help businesses make investments to create more jobs, because even with this positive report, that is certainly needed,” he said.
Highest unemployment in New England
In releasing the May employment numbers, the state Department of Labor also revised its initial estimate for April, reporting a loss of 600 jobs after earlier estimating a gain of 1,200 positions for that month.
The state’s unemployment rate also fell in May to 6%, the lowest in almost seven years.
However, that’s the highest rate of unemployment in New England and a half-point higher than the national average.
“We now have recovered only 82% of the jobs we lost in the recession,” said Gioia. “With 82% job recovery, we are still far below the U.S. rate and even more below neighboring Massachusetts.
“At this pace, it will be June of 2016 before we hit the 100% mark.”
Slow recovery continues
Gioia said the state’s slow pace of recovery from the recession–which ended more than five years ago–still trails the regional and national economies, with Connecticut posting an anemic 0.6% growth rate in the latest report released by the U.S. Department of Commerce.
By comparison, the New England states–led by Massachusetts with 2.3%–posted average growth of 1.6%, with the U.S. averaging 2.2%. Connecticut was 42nd among all states.
Earlier this week, University of Connecticut economist Fred Carstensen, who heads the Connecticut Center for Economic Analysis, said the center would be revising the economic forecast it released in February–when it predicted growth of nearly 8%–based on the Department of Commerce report.
“Basically all of that growth disappeared,” Carstensen told the Connecticut Mirror. “Connecticut is not going to achieve very significant growth over the next two or three years.”
Gioia said that while the state has now gained 26,100 jobs in the last 12 months, manufacturing and finance and insurance–two key drivers of the Connecticut economy–only added a combined 700 jobs, or 2.7%, in that period.
Manufacturing shed 1,000 positions in May, the worst of the three sectors that lost jobs last month. The government sector lost 200 jobs while education and health services posted losses of 100 positions.
Financial activities was unchanged for the month.
Trade, transportation, and utilities gained 3,200 jobs, driven by the opening of a new outlet mall in the eastern part of the state.
Construction and mining added 2,400 jobs, followed by leisure and hospitality (1,200); professional and business services (400); information (300); and other services (200).
Hartford-West Hartford-East Hartford added 5,000 jobs in May, the largest gain among the state’s six labor market areas.
The mall opening in eastern Connecticut helped Norwich-New London-Westerly realize 1,300 new jobs, followed by Waterbury (1,200) and Danbury (900).
Bridgeport-Stamford-Norwalk lost 1,500 jobs during the month, and New Haven shed 1,100 positions.
EXPLORE BY CATEGORY
Stay Connected with CBIA News Digests
The latest news and information delivered directly to your inbox.