Job Growth Retreats in First Quarter

Connecticut’s bright start to 2025 has quickly evaporated, with significant job losses in February and March erasing January’s strong gains.

Employment fell by 4,700 in the first quarter, with 4,500 jobs lost in March and February’s initially reported 1,200-job loss revised to 1,700 in the Department of Labor’s latest monthly report.

Private sector jobs fell by 5,300 in March, driven by large losses in education and health services—the state’s largest employment sector—and professional and business services.

Labor commissioner Dante Bartolemeo called the March report “complicated,” saying the numbers “were impacted by typical things such as survey timing and cold weather.”

“We’ll need to review April’s data to identify any weaknesses in the market,” she said.

“While we remain cautious about 2025, Connecticut’s unemployment rate and the number of unemployment filers remains solidly low, and employers have around 80,000 jobs open.”

Demographics

Connecticut has 82,000 job openings—17% above pre-pandemic levels—with employers continuing to report challenges filling open positions.

While the state has seen the region’s largest increase in job openings since pandemic shutdowns—more the double the national rate—the growth in the labor force has not kept pace.

Connecticut’s labor force is just 1.3% above pre-pandemic levels, in contrast to much of the region and the country, where the number of those working and looking for work has grown 3.8%.

“We don’t have a lot of young people staying in Connecticut or moving to Connecticut. That’s where it comes back to the cost of living.”

CBIA’s Chris DiPentima

CBIA’s Chris DiPentima points to the state’s aging workforce—Connecticut has the third largest proportion of older workers in the U.S.—and its high cost of living as major factors.

“We have the workforce development infrastructure and training necessary to connect individuals with the job openings that are out there,” he said.

“But we have older demographics. We don’t have a lot of young people staying in Connecticut or moving to Connecticut.

“That’s where it comes back to the cost of living. We’ve got to lower the cost of living.” 

Stable Workplaces

Connecticut’s 12-month job growth is just 0.4%, 39th among all states and well below the national rate of 1.2%.

New Hampshire leads the New England states with year-over-year growth of 1.1%, followed by Vermont (0.8%), Rhode Island (0.7%), Connecticut, Maine (0.3%), and Massachusetts (-0.3%).

The state’s labor participation rate is 15th best in the country at 64.9% and private sector average weekly earnings are 4.7% higher than a year ago—the national average is 3.2%.

Private sector average weekly earnings are 4.7% higher than a year ago—the national average is 3.2%.

DiPentima said stability continues to define Connecticut workplaces, with the voluntary quits rate and total separations rate among the lowest in the country.

“However, our hiring rate ranks 46th, with 1.3 open jobs for every unemployed person in the state,” he said.

“Connecticut employers continue to do everything they can to attract and retain talent to meet the demand for their products and services.

“With growing economic uncertainty, there is an urgent need for solutions that will better connect residents with opportunities and attract new people to Connecticut.”

Industry Sectors, Labor Markets

Just three of Connecticut’s 10 major industry sectors posted employment gains in March, led by the government sector—covering state, local, and federal governments, along with casino employment—which added 300 jobs (0.1%).

The financial activities sector grew by 200 positions (0.2%) and trade, transportation, and utilities gained 100 jobs (0.03%).

Education and health services, lost 2,100 jobs (-0.6%)—with private education services responsible for 95% of those losses—to lead all losing sectors.

Professional and business services declined by 1,800 positions (-0.8%), followed by manufacturing (-500; -0.3%), other services (-300; -0.5%), leisure and hospitality (-200; -0.1%), information (-100; -0.3%;), and construction (-100; -0.3%).

Three of the state’s five major labor market areas saw gains in March, led by Bridgeport-Stamford-Danbury with 700 jobs (0.2%).

Hartford-West Hartford-East Hartford added 400 positions (0.1%) and Waterbury-Shelton gained 100 (0.1%).

New Haven experienced the largest losses, with employment declining by 2,100 jobs (-0.7%), while Norwich-New London-Willimantic lost 200 positions (-0.2%).