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Connecticut loses 1,400 jobs in June, driven by drops in local government

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Connecticut lost 1,400 jobs in June, between losing 2,200 government jobs and gaining 800 private-sector jobs, the state Department of Labor said in its monthly report released Thursday.

The Norwich-New London-Westerly labor market area was one of only two in the state to gain jobs, out of six; it saw a 0.2 percent increase — 200 jobs — while New Haven saw a 0.1 percent increase.

Andy Condon, director of the department's Office of Research, pointed out that the statewide job loss was driven primarily by the loss of jobs in local government, which includes local school and casino staff.

"Changes in school calendars and the timing of summer employment can often make seasonal adjustment of local government difficult," he said in the release. "We will have to wait until next month to see if this drop in government employment was an anomaly."

While June employment dropped 0.1 percent to 1,692,200 jobs, the unemployment rate also dropped, from 3.8 percent to 3.7 percent. This is the same unemployment rate as the U.S. average. The state originally put the May job losses at 1,500, but revised that to 1,900 in its latest report.

Following government, the sectors with the next highest employment losses in June were construction and mining; other services; trade, transportation and utilities; and information.

The education and health services sector gained 1,600 jobs in June, while the other sectors gaining jobs were financial activities, professional and business services, and leisure and hospitality. Manufacturing remained unchanged at 160,700 jobs.

Average hourly earnings in the private sector increased 4.3 percent from June 2018, to $32.77.

Connecticut has recovered 79.3 percent of the 120,300 jobs lost in the Great Recession, the Department of Labor said, lagging far behind other states. The private sector in the state has recovered 101 percent of the jobs lost in the 2008-10 downturn.

The state's economy is not likely to see full job recovery until late 2021, Don Klepper-Smith, chief economist with DataCore Partners LLC, said in his economic newsletter.

He characterized the June job numbers as "abysmal," saying they "show continued and significant weaknesses in Connecticut's labor markets at a crucial time in the U.S. business cycle."

He said that the aggregate labor data over time suggest not only a weakening economy in the state, but also the high probability of a domestic recession prior to the 2020 presidential election.

"Given the tremendous amount of public sector and private sector debt, a vastly underperforming job market, soft housing fundamentals, and mounting outmigration, my strong sense is that CT will lead the U.S. economy into recession this time around," Klepper-Smith wrote.

Connecticut Business and Industry Association economic adviser Pete Gioia noted that state jobs dropped 0.3 percent since January while they increased 0.7 percent nationwide, calling it a "troubling pattern." CBIA is the state's largest business organization and often takes conservative legislative positions.

"Even more troubling is the lack of urgency from policymakers," Gioia wrote in a news release. "This is a serious problem. We're in a jobs funk and we need a new policy direction to reverse what is a troubling trend."


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