Mismatch: Job Openings Grow, Labor Force Shrinks

Connecticut job openings jumped 2.6% in May to 87,356, led by growing demand in the healthcare, retail trade, and manufacturing sectors.

State Department of Labor data shows the need for workers remains strong, compounding employer frustration over the lack of skilled applicants.

Businesses continue to advertise tens of thousands of available positions as the state’s labor force—those working and looking for work—declines dramatically.

Since May 2025, 37,700 people (-1.9%) left Connecticut’s labor force, which is now at its lowest point in almost five years.

In addition, unemployment increased significantly over the last 12 months, with the jobless rate climbing 2.3 percentage points to 5.1%, eighth highest in the country.

That year-over-year spike was the third highest of any state.

Who’s Hiring?

Healthcare and social assistance had 16,347 job postings in May, the highest number of openings of any sector.

Healthcare continues to dominate the hiring landscape. Registered nurses accounted for the single largest number of openings (4,201), while home health and personal care aides ranked third with 2,498 postings.

The state’s aging population is driving demand for nurses, aides, and other medical professionals faster than educational institutions can produce new graduates, leaving hospitals, nursing homes and home health providers competing aggressively for workers.

The retail trade sector had 9,528 postings, with salespersons and first-line supervisors among the state’s most sought-after occupations, underscoring continued demand in consumer-facing industries.

Manufacturing accounted for 7,742 postings, with openings remaining at a stubbornly high level even with recent strong job growth—the sector added 4,700 jobs in the last 12 months (3.1%) and leads all sectors.

Annual manufacturing salaries in Connecticut average $100,745, and companies such as submarine builder General Dynamics Electric Boat and aerospace OEMs and suppliers continue to recruit thousands of workers.

However, while workforce development programs have expanded training pipelines, retirements, specialized skill requirements, and demographic trends are limiting the available talent pool.

The Affordability Factor

Connecticut’s aging population, retirements, slower population growth, and affordability challenges are the primary factors limiting labor supply.

“You can’t have long-term, sustainable economic growth without job growth, and it is critical that policymakers address the structural issues impacting the jobs market,” said CBIA president and CEO Chris DiPentima.

DiPentima noted that Connecticut has the country’s fifth highest average private sector weekly earnings ($1,328), while the state’s $101,065 per capita personal income remains the highest among all states.

Another 11,900 residents left the Connecticut labor force last month, with 12-month losses at 37,700 (-1.9%). The population of those working and actively looking for work is at its lowest point in almost five years—despite over 85,000 job openings. 1/2 https://t.co/60FE828Ciw

— CBIA (@CBIANews) June 26, 2026

“Connecticut workers already earn some of the highest wages in the country, yet many families continue to struggle with the cost of housing, healthcare, energy, childcare, and other necessities,” he said.

“Policymakers must focus on lowering the underlying costs that make Connecticut so expensive for both families and employers.”

Connecticut is the 10th most expensive state to live based on the Missouri Economic Research & Information Center’s composite cost of living index, with energy, housing, and healthcare costs the primary factors.

CNBC’s 2025 America’s Top States for Business ranks Connecticut as the seventh costliest state to run a business, driven by high labor costs, regulatory burden, and energy prices.

Job Growth

The volume of advertised positions stands in sharp contrast to Connecticut’s slow job growth, with total nonfarm payroll levels just 0.4% higher than a year ago.

Four of the state’s 10 main industry sectors saw gains in that period, with growth concentrated in a narrow group of industries, led by manufacturing, which saw almost of one-third of its annual growth in April.

However, manufacturing employment remains below pre-pandemic levels, with the sector recovering less than half of the 11,800 jobs lost in March and April of 2020—overall, the state has recovered 109% of pandemic losses.

Education and health services continued to post strong year-over-year gains, along with other services and construction.

Business have warned for years that labor availability—not customer demand—was the state’s principal constraint on economic growth.

CBIA’s 2025 Survey of Connecticut Businesses revealed that finding and retaining workers was challenging for 76% of companies, business leaders citing the state’s high cost of living as the greatest obstacle to finding talent.

Economic Impact

Connecticut’s broader economy has shown resilience in the face of its labor market struggles.

The state’s gross domestic product grew at a 1.8% annualized rate during the first quarter of 2026— 17th best across all states—with New England’s economy expanding 2% and U.S. GDP growing 2.1%.

That divergence between GDP growth and employment growth reflects productivity enhancements as businesses generate more economic output—even as overall hiring remains subdued.

Companies have invested in automation, digital technologies, and operational efficiencies while remaining cautious about expanding permanent staffing amid continued economic uncertainty.

“Despite persistent headwinds, Connecticut businesses continue to leverage innovation and adaptability to drive productivity gains,” DiPentima said.

“It’s interesting to imagine where economic growth could be if we had the workers to fill those tens of thousands of job openings.”