Job Growth Trapped in ‘Holding Pattern’

Connecticut added just 300 jobs in November, as employers continue to face challenges finding workers to fill tens of thousands of open positions.

The modest gain ended a four-month run of losses. While 17,900 jobs were added through the first half of 2024, 4,400 positions were lost over the last five months.

At 0.6%—eight-tenths of a point below the national rate—Connecticut’s 12-month job growth is the slowest in the region and fifth worst in the country.

“Connecticut’s job growth is trapped in a frustrating holding pattern,” said CBIA president and CEO Chris DiPentima.

“That stagnant growth stands in contrast to the significant gains being experienced in other states in the region and across the country.”

New Hampshire leads the region with 2.1% year-over-year growth, followed by Rhode Island (1.7%), Vermont (1.5%), Maine (0.7%), Massachusetts (0.7%), and Connecticut.

Shrinking Labor Force

Connecticut has 73,000 job openings, or 1.3 positions for every unemployed person, with the labor shortage seen as the greatest growth challenge.

While job openings are 5% above pre-pandemic levels, 28,100 people (-1.5%) have left the labor force since February 2020.

That concerning decline is in stark contrast to regional and national trends—New Hampshire (-0.3%) is the only other New England state with a smaller post-pandemic labor force.

At 2.4%, Rhode Island has the region’s strongest labor force growth, followed by Vermont (1.5%), Massachusetts (1.3%), Maine (1.3%), New Hampshire, and Connecticut.

The U.S. labor force has grown 2.4% since February 2020.

Affordability Challenges

Unemployment remained at a near-record low 3% in November, eighth lowest in the country and an ongoing reflection of the state’s labor force declines.

DiPentima emphasized the connection between the labor shortage and Connecticut’s high cost of living, with energy, housing, childcare, and taxes among the key factors impacting affordability.

Connecticut Department of Labor research director Patrick Flaherty also noted that investments in housing and affordability “are key to attracting and retaining the workforce.”

DiPentima pointed to the latest GDP numbers as a reminder of how Connecticut’s slow job growth was impacting overall economic growth.

“We saw 3% GDP growth in the third quarter, which was 26th fastest among all states and sixth best in the Northeast,” he said.

“While we’re getting GDP growth close to the national average—mostly because of productivity efficiencies and innovation—we’re behind in the region because we’re just not getting the same job growth,” he said. 

Make Affordability a ‘Priority’

Connecticut wages increased an average 3.1% in 2023 and the November employment report shows workers continue to see strong wage gains through 2024.

Average hourly earnings rose 4.7% to $38.32 over the 12 months through November, while private sector weekly earnings increased 5% over the same period to $1,287.55.

The U.S. Department of Labor’s latest Job Openings and Labor Turnover Survey also shows the overall stability of Connecticut workplaces.

As of October, the state’s voluntary quits rate was 1.8%, second-lowest in the region and sixth lowest in the country.

“Lawmakers must examine every proposal through this lens: ‘How will this bill make Connecticut more affordable?'”

CBIA’s Chris DiPentima

“Employers are playing their part—their top investment priority is attracting and retaining employees, while wage growth remains strong,” DiPentima said.

“Now policymakers must play their part—when the General Assembly session begins next month, lawmakers must examine every proposal through this lens: ‘How will this bill make Connecticut more affordable?’

“CBIA’s Reimagine Connecticut policy solutions feature a range of recommendations that will address the high costs of housing, childcare, healthcare, and energy.

“These policy solutions, supported by a bipartisan group of 70 lawmakers, will help us seize the moment and expand our workforce, grow our economy, and improve our quality of life.”

Industry Sectors, Labor Markets

Half of Connecticut’s 10 major industry sectors posted employment gains in November, led by education and health services, which added 1,000 jobs (0.3%).

The financial activities sector added 500 jobs (0.4%), followed by construction and mining (300; 0.5%), other services (300; 0.5%), and trade, transportation, and utilities (300; 0.1%).

Employment in the information sector was unchanged for the month.

Professional and business services lost 900 jobs (-0.4%) to lead all losing sectors.

The government sector declined by 500 jobs (-0.2%), followed by leisure and hospitality (-400; -0.3%) and manufacturing (-300; -0.2%).

Construction, education and health services, professional services, and trade, utilities, and transportation are the only sectors to recover all pandemic job losses.

Two of the state’s six major labor market areas posted gains in November, with New Haven gaining 1,400 jobs (0.4%) and Hartford-West Hartford-East Hartford adding 800 (0.01%).

Danbury was unchanged for the month.

Bridgeport-Stamford-Norwalk (-0.02%), Norwich-New London-Westerly (-0.1%), and Waterbury (-0.1) each lost 100 jobs.