Job, Labor Force Declines Continue in September

A second month of job losses and continued declines in the state’s labor force are raising new concerns about Connecticut’s economic outlook.

Payrolls shrunk by 300 last month, following the loss of 2,200 jobs in August, according to the state Department of Labor’s Oct. 21 monthly employment report.

That brings 12-month job growth to a modest 0.7%, the slowest in the region and 42nd best in the country.

“It’s concerning to see the positive economic momentum that highlighted the first half of the year has stalled,” said CBIA vice president for public policy Chris Davis.

Labor department research director Patrick Flaherty acknowledged that the job market “continues to present challenges for recruiters.”

“Stronger economic growth is constrained by the size of the workforce and high retirements in key industries such as manufacturing,” he said.

Labor Force

The state’s labor force—the number of employed residents plus those actively looking for work—fell by 2,000 people in September, the fourth consecutive month of losses

Connecticut currently has 77,000 job openings—10% more than before the pandemic—while the labor force has declined by 30,600 (-1.6%) over the same time.

DOL officials highlighted the state’s falling unemployment rate—now 3.2%, 15th lowest in the U.S. However, that is largely a reflection of the labor force contraction.

While the number of unemployed residents has fallen by 21,500 (-26%) since January, employment only grew by 8,700 (0.5%) and the labor force declined by 1,900 (1%) over the same period.

“The demand for workers remains strong,” Davis said. “What employers need are the people to fill those jobs.”

Connecticut’s labor market declines stand in stark contrast with the region and nationally, where the population of those working and looking for work has expanded 2.6% since the pandemic.

At 2.9%, Rhode Island has seen the region’s strongest post-pandemic labor force growth, followed by Vermont (1.7%), Massachusetts (1.2%), Maine (1%), New Hampshire (-0.5%), and Connecticut.

At 2%, New Hampshire leads the New England states in job growth over the past 12 months, followed by Vermont (1.8%), Rhode Island (1.3%), Massachusetts (0.9%), Maine (0.9%), and Connecticut.

Wage Growth

Connecticut’s labor participation rate stood at 64.1% in September, 20th best in the country and down two-tenths of a point from a year ago.

Workplaces remain stable, with the state’s voluntary quits rate at 1.7%—sixth lowest in the U.S.—and the total separations rate is fifth lowest at 2.7%.

Average hourly earnings increased $2.21 (6.1%) over September 2023 to $38.21, with average private sector weekly earnings up $96.74 (8%) to $1,299.14.

Annual salaries in Connecticut increased an average 34% over the last decade, marked by a 7.9% jump in 2020.

Davis said growing Connecticut’s population and expanding the labor force required a greater “focus on addressing structural economic issues that predate the pandemic.”

“Voters face an important decision in this election,” he said.

“It’s essential that policymakers focus on expanding options for quality, affordable childcare, housing, and small business employee healthcare.

“CBIA’s recently released Reimagine Connecticut policy pledge features solutions specifically designed to expand our workforce, grow our economy, and improve our quality of life.”

Industry Sectors, Labor Markets

Four of Connecticut’s 10 industry sectors posted employment gains in September, led by professional and business services, which added 1,800 jobs (0.8%).

Other services added 400 positions (0.6%), followed by education and health services (400; 0.1%) and financial activities (300; 0.3%).

Manufacturing was unchanged for the month, with year-over-year sector employment down 0.4%, despite an estimated 8,000 openings.

Professional and business services lost 900 jobs (-0.3%) to lead all losing sectors.

Construction and mining employment declined by 800 jobs (-1.3%), followed by information (-700; -2.3%), leisure and hospitality (-500; -0.3%), and government (-300; -0.1%).

Education and health services, construction, professional services, and trade, utilities, and transportation are the only sectors to full recover all pandemic job losses.

Two of the state’s six major labor market areas posted gains in September, with Waterbury gaining 300 jobs (0.4%) and Danbury adding 200 (0.3%).

Norwich-New London-Westerly lost 600 jobs (-0.5%), followed by Bridgeport-Stamford-Norwalk (-600; -0.1%), Hartford-West Hartford-East Hartford (-400; -0.1%), and New Haven (-200; -0.1%).