Late Summer Brings Job, Labor Force Losses

Connecticut lost 3,100 jobs in July and August, ending a six-month growth streak as most industry sectors saw declines.

The Department of Labor reported 2,200 job losses for August and revised its preliminary July numbers lower by 1,600 to a loss of 900 positions.

August also saw another 5,295 people leave the labor force, with the numbers of those working and looking for work declining 11,965 in the last three months (-0.6%).

“After a strong first half of the year, it’s concerning to see job losses of this size and across so many sectors,” said CBIA president and CEO Chris DiPentima. 

“The August losses and revised July numbers highlight the volatility of Connecticut’s job market and the structural issues impacting economic growth.

“It also speaks to the ongoing challenges that employers are facing as they work to fill the 84,000 open jobs in the state.”

Labor Force

While Connecticut’s job openings have increased by 20% since February 2020, the labor force has declined 1.5%, in stark contrast to much of the region and the country.

Rhode Island leads the region in post-pandemic labor force growth at 3%, followed by Vermont (1.7%), Massachusetts (1.1%), Maine (0.7%), New Hampshire (-0.6%), and Connecticut.

Nationally, the labor force has grown 2.5% since February 2020 while job openings increased 10% over that period.

The unemployment rate fell two-tenths of a point to 3.4% in August—22nd among all states—with the labor participation rate down slightly to 64.2%, 20th best in the country. The U.S. rate is 62.7%.

DiPentima said Connecticut’s workplaces “have never been more stable,” with the voluntary quits rate fifth lowest in the U.S. and total separations 12th lowest of all states.

“Average hourly earnings in Connecticut are 7% higher than the national average, with private sector wages up 6.5% over a year ago,” he said.

“It’s clear employers are doing everything in their control to address labor shortage challenges, with talent recruitment and retention the top investment priority for a second consecutive year.

“These latest numbers serve as a reminder that policymakers must remain focused on addressing the issues preventing job growth from meeting the needs of our economy.”

Growth Trends

Connecticut added 12,800 jobs over the past 12 months. At 0.8%, that’s the second slowest growth in the region and 41st best in the country.

Vermont leads the New England states at 2%, followed by New Hampshire (1.5%), Massachusetts (1.1%), Rhode Island (0.8%), Connecticut, and Maine (0.7%). The U.S. rate is 1.5%.

Pandemic job loss recovery stands at 104%, with the national average at 129%. Only four of the state’s 10 main industry sectors—construction, education and health services, professional services, and trade, transportation, and utilities—have recovered all COVID-related losses.

DiPentima said structural factors that predate the pandemic are impacting the growth of jobs and Connecticut’s labor force.

“CBIA’s 2024 Survey of Connecticut Businesses showed that 91% of business leaders say the cost of doing business is increasing, and only 10% believe the state’s business climate is improving.

“The CBIA Foundation recently released its long-term roadmap for boosting the state’s competitiveness, retaining and attracting investment and talent, fostering innovation, expanding career pathway opportunities, and growing a vibrant economy.

“It’s critical that we enact solutions to address the high cost of living and running a business in the state, while expanding career pathways and workforce development efforts to provide rewarding opportunities for all residents.”

Industry Sectors, Labor Markets

Employment increased in just two of Connecticut’s 10 industry sectors in August, led by education and health services, which added 1,200 jobs (0.3%).

The information sector gained 600 positions (2%), while employment in the government sector was unchanged last month.

Professional and business services lost 1,300 jobs (-0.6%) to lead all losing sectors.

Manufacturing lost 700 jobs (-0.4%) with year-over-year sector employment down 0.4%, despite an estimated 8,000 openings.

The sector, critical to the state’s overall economic growth, has recovered only 75% of the 11,800 jobs lost to pandemic restrictions and shutdowns in March and April of 2020.

Other services declined by 600 jobs (-0.9%), followed by leisure and hospitality (-500; -0.3%), trade, transportation, and utilities (-500; -0.2%), construction (-300; -0.5%), and financial activities (-100; -0.1%).

Two of the state’s six major labor market areas posted gains in August, with New Haven gaining 300 jobs (0.1%) and Danbury growing by 100 (0.1%).

Hartford-West Hartford-East Hartford lost 500 jobs (-0.1%), followed by Norwich-New London-Westerly (-300; -0.2%), Bridgeport-Stamford-Norwalk (-300; -0.1%), and Waterbury (-100; -0.1%).