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    Friday, May 10, 2024

    State's unemployment rate for May estimated to be 19%

    Liz Cahn, center, and her daughter Cara eat lunch at Meli-Melo Creperie, Juice Bar & Cafe, Wednesday, June 17, 2020 in Greenwich, Conn. The state began phase two of reopening Wednesday, which includes allowing indoor seating at restaurants during the coronavirus pandemic. (Mark Lennihan/AP Photo)

    Connecticut’s estimated unemployment rate for May climbed to about 19% last month as the state recovered 25,800 jobs, a fraction of the record number lost in April, the state Department of Labor announced Thursday.

    Pandemic-related problems with data collection caused the department to dismiss the state’s official unemployment rate — 9.4% — as inaccurate. The department had issued a similar caution about April’s rate, which it officially reported as 7.9% but estimated actually to be about 17.5%.

    April's job loss was worse than previously reported, with the department raising the number of jobs lost from 266,300 to 269,200.

    “Connecticut saw the beginnings of recovery of the historic job losses in April caused by the COVID-19 pandemic,” Andy Condon, director of the department’s Office of Research, said in a statement. “Leisure and hospitality, retail trade, and education and health services remain the hardest-hit industries. The process of recovery may quicken as Connecticut implements its phased response to the slowing spread of the virus.”

    Nonagricultural employment in the state fell by 251,400 jobs last month compared to May 2019, a 14.9% decline, the department reported.

    In May, the private sector recovered 30,500 jobs lost in April, while the government “supersector” — all federal, state and local employment, including public education and casino employment on tribal land — lost 4,700 jobs.

    The numbers highlight the pandemic’s widespread impact on the state’s economy, according to the Connecticut Business and Industry Association, the state’s largest business organization.

    “May saw the recovery of just 10% of the more than 269,000 jobs that were lost the previous month when shutdown orders and restrictions were put in place,” Joe Brennan, the CBIA president and chief executive officer, said in a statement. “That speaks to the breadth of the damage the pandemic is doing to our economy and the impact it is having on hundreds of thousands of Connecticut residents and families.”

    Brennan said the May jobs report likely did not reflect the full impact of the state’s reopening of its economy, which began May 20, given the timing of data collection. A second phase of the reopening took effect Wednesday, extending to lodging, theaters, health clubs, museums and inside dining at restaurants.

    Gov. Ned Lamont, speaking at a news conference in New Britain, said the state was doing everything it can to make people feel safe about returning to work, noting it has provided online job training programs and an online job fair. He also indicated he favored paying a $450 back-to-work stipend to those who return to their jobs as opposed to an extending the federal government’s $600-a-week unemployment benefit.

    "I think that makes a lot of sense," he said of the stipend.

    Donald Klepper-Smith, an economist with DataCore Partners, said the jobs rebound in May was predictable.

    “While many might want to celebrate the technical bounce-back of jobs in May, it's extremely premature to get excited because this is not likely to be the start of a prolonged upward trend,” he wrote in his monthly newsletter. “Rather, I expect the CT economy to experience the full effects of recession over the next six to nine months with further job losses, fiscal instability, rising outmigration, declining tax revenues, and general economic deterioration.”

    Klepper-Smith said Connecticut’s official unemployment rate of 9.4%, which is well below the national rate of 13.3%, is sending "false signals” about the health of the state’s labor market.

    The state labor department acknowledged as much.

    “Data collection and misclassification issues in the (U.S.) Census Bureau’s Current Population Survey, the foundation of the state’s residential labor force statistics, caused residential unemployment to be severely underestimated,” the department said. “Connecticut’s official unemployment rate is not accurate.”

    A significant number of survey respondents who should have been classified as temporarily out of work and therefore unemployed were instead classified as employed but away from work, for example, sick, the department said.

    The Office of Research said it estimated the unemployment rate to be "in the range" of 19% for the mid-May period, based on unemployment insurance claims and adding a similar factor to account for the unemployed self-employed.

    Five of the state’s six labor market areas posted job gains, including the Norwich-New London-Westerly LMA, which added 3,000 jobs.

    Town-by-town employment data will be released Friday.

    b.hallenbeck@theday.com

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