Shrinking Labor Force Clouds Jobs Recovery


Connecticut gained jobs for a 10th consecutive month in October amid continued concerns about the recovery’s pace and the state’s shrinking labor force.

Employers added 5,300 jobs in October and have now recovered 73% of the historic 292,400 positions lost to COVID-19 restrictions and shutdowns in March and April of 2020. 

New England Year-to-Date Job Growth

New Hampshire has regained 78% of its pandemic-related job losses, followed by Maine (77%), Massachusetts (75%), Vermont (73%), Connecticut, and Rhode Island (70%). The national recovery rate is 81%.

Connecticut’s year-to-date job growth rate is 2.9%, the second slowest in the region after Maine. U.S. job growth through the 10 months to date is 4.1%.

Massachusetts leads the New England region with 5.6% growth, followed by Rhode Island (4.7%), New Hampshire (3.9%), Vermont (3.3%), Connecticut, and Maine (2.1%).

“While it is heartening to see another month of employment gains, the pace of Connecticut’s jobs recovery relative to the region and the country remains a concern,” CBIA president and CEO Chris DiPentima said.

‘Where Have They Gone?’

The state’s unemployment rate declined four-tenths of a point to 6.4% in October as first time benefits claims fell to an average 3,502 weekly, down 6.1% from September and the lowest since February 2020.

However, Connecticut’s unemployment rate remains the sixth highest in the country—almost two percentage points above the national rate of 4.6%.

DiPentima noted that the state’s labor force—the number of employed people plus the unemployed who are looking for work—has decreased by 27,100 since January this year and is down more than 5% from pre-pandemic levels.

Connecticut’s labor force has declined by an alarming 105,400 people since February 2020.

“Since February 2020, the labor force has declined by an alarming 105,400—over five percent,” he said.

“There are 79,500 fewer people working now than in February of last year, despite something on the order of 70,000 job openings.

“The question is this: ‘where have all these people gone?'”

Growth Obstacle

CBIA’s annual 2021 Survey of Connecticut Businesses, released in September in collaboration with Marcum LLP, found that 80% of employers reported difficulty finding and retaining employees.

Over one-third of employers (35%) called the labor shortage the state’s greatest growth obstacle.

The survey also found that 45% of employers were prioritizing investments in recruitment, training, and retention.

DiPentima called for state policymakers to allocate more resources to addressing the labor shortage.

“CBIA is ready to work with the administration and lawmakers to find real solutions,” he said.

“Let’s begin with a survey of unemployed residents to better understand the factors driving this disconnect between job openings and the lack of candidates.”

Industry Sectors

Six of the state’s 10 major industry sectors posted gains, led by education and health services with 1,400 new jobs (0.4%).

Financial activities added 1,300 jobs (1.1%), followed by professional and business services (1,300; 0.6%), leisure and hospitality (1,100; 0.8%), trade, transportation, and utilities (900; 0.3%), and other services (600; 1%).

DiPentima called the financial activities sector’s strong gains “a real highlight for the month.”

“That’s a key component of the state’s economy and one of just two sectors still below pre-pandemic employment levels,” he said.

Government, which includes casino employment, led all declining sectors, losing 600 jobs (-0.3%).

Construction and mining declined by 300 positions (-0.5%), followed by manufacturing (-300; -0.2%), and information (-100; -0.4%).

The manufacturing losses were largely aerospace jobs, reflecting the pandemic’s continued impact on commercial aviation.

Four of the state’s major labor market areas saw gains in October, led by Bridgeport-Stamford-Norwalk with 4,000 net new jobs or 1.1%.

Hartford-West Hartford-East Hartford added 3,500 jobs (0.6%), followed by New Haven (600; 0.2%) and Danbury (100; 0.1%).

Employment in Norwich-New London-Westerly declined 0.2% (-200) and Waterbury also lost 200 jobs (-0.3).


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