HARTFORD, CT — If the 4,100 jobs Connecticut gained in May hold up through 2018, then the state will have recovered 81 percent of the jobs lost in the 2008 recession.
That’s according to the latest labor situation report provided by the U.S. Bureau of Labor Statistics.
The May job increase “overcame most of the decline” in the previous two months, Andy Condon, director of research at the Department of Labor, said.
Connecticut lost an estimated 5,400 jobs in March and April.
“There was surprising strength in retail trade and a good showing for financial activities, both of which are now ahead of last year’s pace,” Condon added.
Job recovery is in its 99th month. The state still needs an additional 22,600 net new jobs to reach overall expansion since the recession of 2008.
The private sector has recovered 102.3 percent of the jobs lost in the recession. But the public sector, which includes local, state, and federal government, and also the tribal nations, has not rebounded as quickly.
“Today’s job numbers demonstrate that Connecticut has more private sector jobs than we did before the Great Recession,” Gov. Dannel P. Malloy said Thursday. “It also reflects the fact that government is smaller today than when I took office — just as I promised to do eight years ago.”
Malloy, who has struggled with a sluggish state economy, is not seeking re-election.
Don Klepper-Smith, an economist with DataCore partners who advised former Gov. M. Jodi Rell, said that while Thursday’s report was a “welcome reprieve,” he doesn’t believe Connecticut will see a full recovery until 2020.
“Extrapolating this growth out in time, we see that the state’s economy is not likely to see full job recovery until sometime in early 2020, and odds are we’re likely to see a full-blown U.S. recession before that time if history is any indication,” Klepper-Smith said.
“My strong sense is that employers will continue to add jobs through the balance of 2018, but only on a selective basis where they can add to bottom line productivity or profitability,’ he added.
Over the year, the state has gained 11,500 jobs, or 0.7 percent.
Klepper-Smith, who advises looking at these numbers over a longer period of time, said that the numbers in the first five months of the year indicate a “labor market that is moving sideways more than anything else.”
Connecticut Business and Industry Association Economist Pete Gioia said the private sector is starting to “grow at a moderate rate.”
He also noted that the state is starting to see year-over-year trends that are more positive.
“The biggest concern is that the labor force shrank again,” Gioia said.
“We have so many good, well-paying jobs available and we need a labor force to fill those jobs as rapidly as possible.”
Connecticut’s unemployment rate remained unchanged at 4.5 percent, which is above the national average of 3.8 percent.
It should also be noted that the monthly data from the federal Bureau of Labor Statistics is based on a sampling, rather than an actual count of jobs. According to CTNewsJunkie’s analysis of the data in these monthly reports, the employment figures reported each month based on sampling during 2016 were overestimated by an average of 5,425 jobs per month. An analysis of the 2017 data is coming soon.
And other economists have panned the labor department’s monthly jobs reports for failing to look back to Connecticut’s employment peak for a more complete frame of reference on the economy. This point has often been highlighted by UConn’s Fred Carstensen, who has frequently suggested that the state should be basing its analysis on a longer frame of reference than just back to the recession of 2008.
Carstensen has often said that Connecticut’s core problem is the absence of job creation dating back to 1989, adding that since February 1989 the state had seen only 11 months in which total employment exceeded the previous high.