February Jobs Report: Is Labor Market Shifting?

Connecticut added 900 jobs in February amid growing signs of an easing in the state’s labor market.

The state’s labor force—those working and those actively looking for work—increased by 4,000 in February and is up 20,000 over the last 12 months.

While the labor force remains 24,700 people (-1.3%) below pre-pandemic levels, CBIA president and CEO Chris DiPentima called the growth trend “a positive for employers and our economy.”

“Connecticut has 90,000 job openings—20,000 more than before COVID—and 86,100 people looking for work,” he said. 

“That’s a sharp contrast to just a few months ago when there were essentially 1.5 jobs for every unemployed person in the state.”

Department of Labor research director Patrick Flaherty called the labor force expansion “important—Connecticut businesses need workers to grow.”

‘Good News’

Flaherty added that Connecticut’s rising unemployment rate—now 4.5%, seventh highest in the country—was “a function of workers coming into the labor market.”

“They go from being ‘not in labor force’ to ‘unemployed’ before they become employed,” he said.

“The state’s economy needs everyone off the sidelines; having more workers starting to look for jobs is good news.”

Connecticut’s labor participation rate is 64.5%, 18th best in the country. The national rate is 62.5%.

The February employment report also revised January’s initially reported gain of 7,400 jobs down to 5,800, bringing 12-month growth to 14,900 (0.9%).

That ranks 39th among all states and second-slowest in the New England region. U.S. 12-month job growth is at 2.6%.

Rhode Island leads the New England states at 1.8% year-over-year growth, followed by Maine (1.5%), New Hampshire (1.2%), Vermont (1.1%), Connecticut, and Massachusetts (0.7%).

Supply vs Demand

DiPentima said the pace of job growth “needs to accelerate to meet the growing demands of Connecticut’s economy.”

“Connecticut employers continue to see strong demand for their products and services—they need more people to sustain that demand,” he said.

“It is critical that we broaden and target skills-based workforce development efforts across the state to connect those looking for work to those job openings.

“The pace of job growth needs to accelerate to meet the growing demands of Connecticut’s economy.”

CBIA’s Chris DiPentima

“Policymakers must enact solutions that address the labor shortage, make Connecticut a more affordable place to live and work, and provide opportunities for all residents.”

Connecticut has recovered 101% of the historic 290,200 jobs lost to pandemic shutdowns and restrictions in March and April of 2020.

Maine leads the region at 117%, followed by New Hampshire (113%), Rhode Island (104%), Connecticut, Massachusetts (99%), and Vermont (95%). The U.S. recovery rate is 125%.

Industry Sectors, Labor Markets

Employment grew in four of Connecticut’s 10 major industry sectors in February, led by other services, which added 1,600 jobs (2.5%).

Financial activities gained 600 positions (0.5%), followed by construction and mining (500; 0.8%) and leisure and hospitality (200; 0.1%).

The trade, transportation, and utilities, manufacturing, and information sectors were all unchanged for the month.

Professional and business saw the largest declines in February, losing 1,700 jobs or -0.8%, with government down 200 (-0.1%) and educational and health services falling by 100 (-0.03%).

Three of the state’s six major labor market areas posted gains in February, led by Hartford-West Hartford-East Hartford, which added 200 jobs (0.03%).

Waterbury added 100 positions (0.1%), as did Norwich-New London-Westerly (0.1%). New Haven was unchanged for the month.

Bridgeport-Stamford-Norwalk lost 900 jobs (-0.2%), with Bridgeport-Stamford-Norwalk losing 300 (-0.1%) and Danbury declining by 100 (-0.1%).