Jobs concept on the chalkboard
Credit: ChristianChan / Shutterstock

The state Department of Labor issued a preliminary report Thursday that indicated Connecticut added 4,700 jobs in September. If those numbers hold it marks the ninth straight month of job gains in Connecticut.

The unemployment rate which is based on a survey of households fell from 7.2% in August to 6.8%. 

However, the total economic picture is more complicated because Connecticut is still 86,000 jobs shy of where it was when Gov. Ned Lamont declared a public health emergency in March 2020.

There are help-wanted signs up and down Main Street, but 52,000 people filed for unemployment. That’s down from more than 100,000 just a few months ago. 

“While there is more work to do, both unemployment and job growth rates continue to be positive news for the state’s economy and our workforce,” Labor Department Commissioner Dante Bartolomeo said in a press release. “There are thousands of good-paying jobs with benefits out there and employers are hiring quickly – in some cases on site at job fairs and other events. It’s a great time for workers to strengthen their skills, get into the market, and even start a whole new career.”

Connecticut Business and Industry Association President and CEO Chris DiPentima said the improvement is still shy of where the state needs to be for a full recovery.

Chris DiPentima, CBIA President and CEO
Chris DiPentima, CBIA President and CEO Credit: Contributed / CBIA

“Connecticut’s unemployment rate is 6.8%, the highest in the region and two percentage points higher than the national rate,” DiPentima said. “And, most concerning of all, there are 70,000 unfilled job openings in Connecticut, yet we have 86,600 fewer people working than in February of last year.”

The numbers aren’t adding up for the business community.

”Employers are sounding the alarm loud and clear – the labor shortage is the number-one problem facing the state’s pandemic recovery and our long-term economic outlook,” DiPentima said. “The challenge is this, how do we get people back into the workforce? The jobs are there and it’s clear that we need a more aggressive approach to resolve this issue.”

The Labor Department said the state has regained 70.4% of the jobs lost during the pandemic lockdown. Food services, retail, and professional services have recovered 75% of the jobs lost, but there are still labor shortages that are causing some places to have to limit their hours or close their doors.

“Connecticut has now regained just over 70% of the jobs we lost during the March-April 2020 pandemic lockdown,” said Patrick Flaherty, director of the Labor Department’s Office of Research. “The high performers this month were in Wholesale Trade, Transportation & Warehousing, and Healthcare & Social Assistance – in total, contributing 4,100 jobs to the economy. Construction has now regained all of the jobs lost during the pandemic. We are going in the right direction and anticipate continued progress.”

It should also be noted that the monthly data from the federal Bureau of Labor Statistics (BLS) used for this report is based on a sampling method, rather than an actual count of jobs. During the course of the year, each monthly report includes “preliminary” job numbers for the previous month, and “revised” job numbers for the month before that. And once a year the data from the previous year is revised again.

Not Everyone Agrees With The Data

Fred Carstensen, a professor of finance and economics at UConn, is not sold on the data.

Fred Carstensen

Asked via email for his thoughts on September’s preliminary jobs report and whether Connecticut’s economy is really recovering, Carstensen said it is not.

“No, it isn’t recovering. Employment remains well below the level of February 2020 and even further below the level of March 2008 – more than 110,000 below,” Carstensen wrote. “At 4-5,000 jobs a month, that means recovery to where we were in 2008 will take 22 months – until the end of 2023. But both DataCore and CCEA in their forecasts have worried that recovery might take much longer, possible [sic] 2030; nothing in the current report argues against that pessimism.”

Carstensen also said job quality has deteriorated in Connecticut, adding that the state has lost a quarter of the jobs in the finance/insurance sector, nearly 75% of the jobs nondurable manufacturing goods like pharmaceuticals, and has gained jobs almost entirely in tourism, hospitality, logistics, and eldercare – “all paying less than $40K IF someone worked a full 2,000 hours. But very few do.”

Carstensen said the proof of the deterioration is the state’s $500-million drop in withholding tax revenues over the last eight years because lower-income households pay far less income tax.

“And perhaps 140,000 CT residents took jobs outside of CT – and pay their income tax in the state where they work,” he wrote. “But that has collapsed since November 2019 – by 167,000 according to the latest data. Many may now move out of CT as they look for new jobs; CT’s population is likely to fall in the next few years as a result.”

Carstensen also said that the state’s “real output” has shrunk while the nation’s has grown, and he said there’s no data available on business formations that indicate the state’s economic trajectory is changing. But he also said the lack of data availability may soon change based on recent initiatives.

He said a worrisome number that the Labor Department does not report is the employment of Connecticut residents regardless of where they work, because that figure, he said, “is down HUGELY” despite having grown steadily, even during the Great Recession.