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Connecticut’s labor market did not get off to a great start this year. Payroll employment dropped 700 jobs in January. 

The December 2021 job numbers were also adjusted downward to a 500 job gain. The unemployment rate for January was 5.3%, up two-thirds since December 2021.

Labor officials blamed Omicron. 

“Connecticut’s economy was not immune to the effects of the Omicron variant which caused weakness in December and January,” Patrick Flaherty, director of the Labor Department research unit, said. “Nevertheless, important industries such as manufacturing and construction continued to add jobs.”

In January, private sector employment declined by 1,700 jobs. The government sector added 1,000 jobs.

Connecticut’s private sector has now recovered 79.9% of the jobs it lost during the COVID lockdown almost two years ago. The government sector is about 1.7% higher than it was last January.

“We’ve seen significant economic recovery over the past year—businesses hit hard by the pandemic are coming back; hiring is up; and the unemployment rate is down; it’s good news for the state’s economy and for the workforce,” Labor Commissioner Dante Bartolomeo, said. “The numbers released today highlight the underlying strength of the economy and continued good news for job seekers. There are challenges ahead of us—it’s important to keep the virus in check to keep the economy growing, and we must continue efforts to attract workers to Connecticut.”

Connecticut’s business lobby was not impressed. 

“This is a disappointing start to the year, particularly given the number of private sector job losses, and further emphasizes how critical it is for policymakers to prioritize job growth,” CBIA president and CEO Chris DiPentima said. “January breaks a streak of nine consecutive months of job growth, highlighting the fragility of our pandemic recovery and the multiple challenges we face.”

DiPentima says there are 110,000 job openings.

“The time for lawmakers to focus is now. I cannot emphasize enough the size and scope of this issue and the potentially disastrous consequences if we fail to act,” DiPentima said. 

He said they have to make it easier to create jobs and get rid of unnecessary mandates. He said they should also ease licensing requirements. 

The labor news comes at the same time as the Consumer Price Index increased to 7.9% — the highest in 40 years.

The gasoline index rose to 6.6% in February and the food index rose 1%. The home index rose 1.4% — both were the largest monthly increases since April 2020.