HARTFORD, CT — Connecticut lost jobs in February, according to the U.S. Bureau of Labor Statistics, but revised numbers suggest that the state gained 800 more jobs in January than initially estimated.
The report should be tempered, however, by the likelihood that it contains a sampling error. Last year the job numbers were overestimated each month by an average of 5,425 jobs.
This latest labor situation report says the state lost 1,600 nonfarm jobs in February, but gained 6,500 jobs — instead of 5,700 — in January. It’s a difference of 800 jobs, suggesting that Connecticut is showing a net gain of 4,900 for the year.
However, the monthly reports are based on a sampling process conducted by the federal Bureau of Labor Statistics (BLS). Each month, the BLS releases the state-by-state data and the state Department of Labor here releases a report showing the latest month as “preliminary” and the previous month as “revised.” Annually, the monthly data for the previous year is revised yet again and announced in early March.
On March 10, CTNewsJunkie reported on the annually revised numbers for 2016, which showed Connecticut’s job growth was basically flat for the year despite showing gains in the preliminary data reported each month.
A comparison of the annually revised job numbers to those announced monthly showed that the monthly BLS employment figures for 2016 overestimated employment in Connecticut by an average of 5,425 jobs per month.
This was an improvement, with respect to accuracy, over the 2015 overestimation. During 2015, the BLS’s monthly sampling figures overestimated Connecticut’s nonfarm employment by a monthly average of 19,342 jobs. The overestimation was lower for 2014, during which the average was 3,500 higher than the revised figures released the following March.
In 2013, the BLS underestimated job numbers by an average of 5,433 per month.
The report released today is based on a sampling as well but it won’t be clear whether the data is under- or over-estimating actual employment figures until March 2018. Notably, the average error in the 2016 employment data represents a tiny percentage of the overall employment — about three-tenths of one percent of the roughly 1.6 million people employed in nonfarm jobs.
The report also offers a separate category for the unemployment rate. The number of unemployed grew by 4,500 in February and the unemployment rate ticked up two tenths of a point to 4.7 percent.
“We saw a 1,600 job decline in February, although some of that loss may be attributable to very poor weather during the survey reference week,” Andy Condon, Director of the Office of Research, said. “While the unemployment rate moved up to 4.7 percent, labor force also grew, indicating potential workers seeing opportunity in a low unemployment rate environment.”
In February private sector employment dropped 1,500 jobs, and the government sector lost 100 jobs.
That means that Connecticut has only recovered 74.1 percent of the jobs it lost in the Great Recession.
The state has added added 88,200 jobs since the end of the Great Recession, which means it’s about 30,900 jobs from attaining full job recovery.
Don Klepper-Smith, an economist with DataCore Partners in New Haven, said that means Connecticut could reach full recovery by 2019. That’s three years later than initially expected.
“We are now facing the very real prospect of the Connecticut economy not reaching its prior job peak set in March 2008 at 1,713,300 jobs before we start losing jobs again in the next down cycle, which I now believe is a strong possibility,” Klepper-Smith said in his analysis.
He said given that there’s growing pressure on state tax revenues due to outmigration and a slow growth economy where employers are apt to make do with their existing workforce, things are becoming “more tenuous.”
The bottom line is “the Connecticut economy is clearly facing major obstacles to growth heading into 2017 and growing weakness in many of the key metrics is becoming readily apparent. That’s what the numbers are saying,” Klepper-Smith said.