Connecticut took a small step toward economic recovery in May, recovering about 10% of jobs lost the previous month after COVID-19 shutdown orders and restrictions took effect.

The state Department of Labor reported the addition of 25,800 jobs to the state's payrolls, with the unemployment rate at a "severely underestimated" 9.4%.

Connecticut 2020 Job Losses

May's employment report also revised the historic April losses from 266,300 to 269,200—more than double the jobs lost in the 2008-2010 recession.

CBIA president and CEO Joe Brennan said the May report highlights the widespread economic damage from the coronavirus pandemic.

"That speaks to the breadth of the damage the pandemic is doing to our economy and the impact it is having on hundreds of thousands of Connecticut residents and families," Brennan said.

He added that the May report likely did not reflect the full impact of the state's May 20 first phase reopening, given the timing of data collection.

"It was encouraging to see gains, however modest, in the leisure and hospitality, trade, services, and manufacturing sectors," he said.

"However, several sectors, including the key financial activities sector, posted additional losses."

Unemployment Rate

Connecticut has lost 259,500 jobs (-15.3%) through the first five months of the year, with employment falling to 1,434,000—the lowest in more than two decades.

Most of the year's declines were in the private sector. Government employment, down 28,600 this year, includes the state's two casinos, which reopened the first week of June after closing March 17.

The labor department blamed data collection challenges for the reported unemployment rate. Officials believe the actual rate, which was 3.4% in March, is "in the 19% range."

DOL has received 632,000 unemployment claims since mid-March.

"If we don't change our thinking, many of these jobs may never return to Connecticut."

CBIA's Joe Brennan

Unemployment in the six New England states ranges from 9.3% in Maine to 16.3% in Massachusetts and Rhode Island. The U.S. jobless rate is 13.3%.

Brennan repeated a call for greater collaboration between the private and public sectors to both mitigate the pandemic's impact and drive job growth.

"If we don't change our thinking and adopt new approaches, many of these jobs may never return to Connecticut," he said.

"That means focusing on promoting and driving private sector growth by adopting policy measures that will incentivize investment and job creation."

Sectors, Labor Markets

Seven of the state's 10 industry sectors posted gains in May, led by leisure and hospitality, which added 9,400 jobs or 13.4%. The sector has lost 76,500 jobs this year, the most of any industry.

Trade, transportation, and utilities recovered 5,100 jobs (2.1%), followed by other services (4,700; 11.5%), educational and health services (4,600; 1.6%), professional and business services (3,400; 1.7%), construction (3,300; 6.5%), and manufacturing (2,400; 1.6%).

The government sector lost 4,700 jobs (-2.2%) last month. Information dropped 1,300 (-4.4%) and financial activities declined 1,100 positions (-0.9%).

Five of the state's major labor market gained jobs in May, led by Hartford-West Hartford-East Hartford with a gain of 9,200 (1.8%).

Danbury added 3,200 jobs (5.1%), followed by Norwich-New London-Westerly (3,000; 3.2%), New Haven (2,600; 1.1%), and Bridgeport-Stamford-Norwalk (2,100; 0.6%).

Waterbury lost 200 jobs last month (-0.4%).