Connecticut’s Jobs Market? It’s Complicated.

July brought a fifth consecutive month of payroll job growth in Connecticut, with employers adding 2,800 positions to bring 12-month gains to 13,800.

At 0.8%, the state now ranks 10th overall for year-over-year job growth, six-tenths of a point higher than the national average.

However, total employment—which includes nonfarm payrolls, independent contractors, and the self-employed—fell for the seventh straight month and is at its lowest non-pandemic level since 2014.

The labor market—those working and looking for work—also declined for a seventh month, losing another 6,300 people (-0.3%) and is significantly below pre-pandemic levels.

Unemployment remained unchanged at 5.2%—over a point above the national rate—with 22,100 more people unemployed than in July 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.

‘Overall Fragility’

CBIA president and CEO Chris DiPentima called the surge in payroll jobs “encouraging, particularly in key sectors like manufacturing, construction, and education and health services.”

“Nonetheless, our concerns about the overall fragility of Connecticut’s job market continue to grow, given the high unemployment rate and ongoing declines in total employment and the labor force,” he said.

“The gap between Connecticut’s unemployment rate—5.2%—and the national rate of 4.1% is now at its widest point since the pandemic. 

“Total employment is down by 73,600 jobs since July 2025, the largest one-year drop in 50 years of collecting the data, excluding the COVID-19 pandemic. 

“Connecticut’s labor force has fallen by 51,400 in the past 12 months—that’s the equivalent of losing the entire population of East Hartford in a single year.

“We know the jobs are here in Connecticut—what we need are the people to fill those jobs.”

In the release of the July employment report, Department of Labor officials noted that “Connecticut may be back in a pattern of stronger early year job growth that tapers at the end of the year.”

“DOL remains concerned by national and statewide labor force declines—employers need a workforce pipeline to expand and grow,” noted agency commissioner Danté Bartolomeo.

Structural Trends

As of July, Connecticut’s labor force is 50,400 people below pre-pandemic levels (-2.6%)—in sharp contrast with the national average, up 2.8% over the same period.

Massachusetts has the region’s strongest post-pandemic labor force growth (1.7%), followed by Rhode Island (0.6%), Maine (0.5%), New Hampshire (0.2%), Connecticut, and Vermont (-3.8%).

Twelve months ago, Connecticut’s unemployment rate was 3.9%, the lowest in the region. It’s now the highest of the New England states and second highest in the country.

Vermont has the region’s lowest unemployment (2.6%), followed by New Hampshire (2.8%), Maine (3.1%), Rhode Island (3.9%), Massachusetts (4.4%), and Connecticut.

DiPentima noted that Connecticut faced long-term demographic and workforce challenges, “including the gap between our aging workforce and the number of younger workers entering the labor market.”

“Along with slower population growth and reduced immigration, these trends are creating increased pressure on the state’s workforce and overall economy,” he said.

“The structural trends over the last year show that payroll job growth is presenting a stronger economy than many Connecticut residents are really experiencing. 

“Addressing those trends demands a much clearer understanding of what’s driving the growing disconnect between employer payroll numbers and the labor force and unemployment data that’s coming from household surveys.” 

Industry Sectors, Labor Markets

Half of the state’s 10 major industry sectors posted job gains in July, led by education and health services, which added 2,500 positions (0.7%), bringing 12-month gains to 9,400 (2.5%).

Employment in professional and business services grew by 1,100 jobs (0.5%), 2,000 above June 2025 levels (0.9%).

Manufacturing added 500 jobs (0.3%), bringing 12-month gains to 4,700 (3.1%) with total sector employment at its highest level since January 2024.

Construction added 400 positions (0.6%) and continues to lead all sectors in year-over-year percentage gains with 2,300 net new jobs (3.6%).

The information sector added 200 jobs (0.7%), bringing year-over-year gains to 300 (1%).

Trade, transportation, and utilities posted the largest losses of any sector in July, shedding 1,100 jobs (-0.4%), with 12-month losses at 1,000 (-1.1%).

Employment in the other services sector declined by 300 (-0.4%), reducing year-over-year gains to 1,800 jobs (2.8%).

The government sector, which includes state, local, and federal government entities and the tribal casinos, lost 200 jobs in July (-0.1%).

Financial activities lost 200 jobs (-0.2%) last month, with 12-month losses at 2,300 (-2%), the worst of any sector.

Leisure and hospitality employment declined by 100 positions and is down 1,700 (-1.1%) since July 2025.

Payroll jobs increased in all five of the state’s major labor market areas in July, led by Bridgeport-Stamford-Danbury, which added 900 jobs (0.2%).

Norwich-New London-Willimantic added 300 jobs (0.2%), followed by Hartford-West Hartford-East Hartford (300; 0.05%), Waterbury-Shelton (200; 0.1%), and New Haven (200; 0.07%).