Job Growth Continues, Workforce Challenges Persist

Connecticut’s job growth streak extended to a seventh month in July, as employment grew by a net 700 jobs.

The Department of Labor’s monthly employment report shows private sector employment grew by 1,900 (0.1%) last month to a record high 1,476,600 jobs.

The report also shows private sector wages increased 4.5% over the past 12 months, with the consumer price index up 2.9% over the same period.

However, Connecticut’s labor force declined for a second straight month, with 5,600 people (-0.3%) dropping from the population of those either working or looking for work.

The state’s labor participation rate fell slightly to 64.4%, 19th best in the country. The national rate is 62.7%.

Unemployment fell three-tenths of a point in July to 3.6%, the second highest rate in the region and 28th best of all states.

Labor Force

Connecticut’s labor force has 23,300 fewer people (-1.2%) than in February 2020, while there are 93,000 job openings—33% higher than pre-pandemic levels.

CBIA president and CEO Chris DiPentima said that represented 1.3 job openings for every unemployed person in the state.

“Every business I talk to, finding people is still their top issue,” DiPentima said.

“We need to fill these job openings—otherwise businesses are concerned that demand for their products and services will eventually go away because they’re not able to fulfill that demand.”

New Hampshire (-0.7%) and Connecticut are the only New England states with a smaller labor force than before the pandemic hit.

Rhode Island’s labor force has grown 3% since February 2020, followed by Vermont (1.7%), Massachusetts (0.6%), and Maine (0.4)%. The U.S. labor force has expanded 2.4%.

“Connecticut needs more people and the state’s high cost of living—driven by high taxes and our energy, housing, and childcare costs—is a key challenge,” DiPentima said.

“We also must better align our education system with employer needs and expand opportunities for underserved populations.”

Growth Trends

Connecticut has recovered 105% of the historic 298,300 jobs lost to pandemic shutdowns and restrictions in March and April of 2020.

Maine leads the region at 119%, followed by New Hampshire (118%), Connecticut, Rhode Island (103%), Massachusetts (101%), and Vermont (97%). The U.S. recovery rate is 129%.

Connecticut has gained 18,600 net new jobs (1.1%) through the first seven months of 2024 and 17,700 over the past 12 months.

The state’s year-over-year job growth rate is 1%, 38th best in the country, with the national average at 1.6%.

Vermont’s 12-month growth rate is 2.3%, the best of the New England states and 9th highest in the country.

New Hampshire’s year-over-year growth rate is 1.4% (27th), followed by Rhode Island (1.2%; 34th), Massachusetts (1.1%; 36th), Connecticut, and Maine (0.9%; 39th).

Industry Sectors, Labor Markets

Employment increased in four of Connecticut’s 10 major industry sectors in July, led by other services, which added 1,300 jobs (2.1%).

Professional and business services gained 600 positions (0.3%), as did education and health services (0.2%), with information up 100 jobs (0.3%).

The trade, transportation, and utilities sector was unchanged for a third straight month.

Government sector employment declined by 1,200 (-0.5%), followed by financial activities (-300; -0.3%), manufacturing (-200; -0.1%), construction (-100; -0.2%), and leisure and hospitality (-100; -0.1%).

Two of the state’s six major labor market areas posted gains in July, led by New Haven, where employment increased by 500 (0.2%).

Waterbury added 300 jobs (0.4%) while Norwich-New London-Westerly was unchanged.

Hartford-West Hartford-East Hartford, which gained 3,300 jobs in June, saw employment fall by 1,100 positions last month (-0.2%).

Danbury lost 400 jobs (-0.5%) and Bridgeport-Stamford-Norwalk declined by 300 (-0.1%).