Connecticut drops jobs in July, unemployment stays low

Stamford is a key part of the Connecticut economy. The state dropped 100 jobs in July 2019, according to state Department of Labor data.

Stamford is a key part of the Connecticut economy. The state dropped 100 jobs in July 2019, according to state Department of Labor data.

Michael Cummo / Hearst Connecticut Media

Connecticut’s embattled economy lost 100 jobs last month, marking its third straight month of declining employment, according to preliminary state data released Thursday.

The new numbers from the state Department of Labor highlight the struggles of a state that still has not recovered all of the jobs lost in its 2008-2010 recession. For the past 12 months, Connecticut has added 3,200 jobs — equating to a meager annual growth rate of 0.2 percent.

“Connecticut’s jobs numbers in the past month were essentially flat,” said Lucjan Orlowski, a professor of economics and finance at Sacred Heart University. “This jobs report simply reflects the ongoing trends in the Connecticut labor market.”

Andy Condon, director of the Labor Department’s Office of Research, gave a similar assessment. In a statement, he said “it’s important to recognize that there is plenty of hiring activity even if net growth is very small.”

At the same time, unemployment remains low. The state jobless rate dropped in the past month from 3.7 percent to 3.6 percent. In comparison, the U.S. rate ran at 3.7 percent last month.

While the unemployment level takes into account the state’s limited jobs growth, it also reflects the thousands of people who have moved out of the state and those who have stopped looking for work.

Private-sector employment decreased by 700 positions in the past month, while it has grown by 5,600 in the past year.

In the past year, education and health services ranks as the sector with the most new jobs in the state, with a gain of 6,800. In the same span, leisure and hospitality has added 2,900 positions, followed by increases of 2,500 for financial activities and 1,800 for information.

But a number of industries have contracted in the past 12 months. The trade, transportation and utilities group — which includes retailers — shed 3,500 positions. The “other services” sector lost 1,900 jobs, the professional and business services dropped 1,100 posts, construction dropped 1,500 and manufacturing decreased by 300.

The public sector added 600 jobs last month, but its employment rolls have shrunk by 2,400 in the past year.

Among other indicators, average private-sector hourly earnings that were not seasonally adjusted moved up slightly from a year ago, while the average number of worked hours ticked down. The resulting average private-sector weekly paycheck came to approximately $1,093, up 0.3 percent from a year ago.

Labor data is subject to changes after its original publication. Alongside the July numbers, the Labor Department revised an originally calculated job loss of 1,400 for June, down to 800.

Looking ahead

Overall, Connecticut has regained 80 percent of the positions it lost in its past recession.

While its private sector has regained all of its positions, the overall rate is affected by public-sector employment levels that are lower than they were before the downturn.

The state’s recovery has taken much longer than the comebacks in several neighboring states. By 2013, Massachusetts had rebounded to its pre-recession employment levels.

Amid growing signs that the country could face another recession in the near future, a number of economists are not sanguine about the state’s ability to soon jump-start its jobs growth.

“Extrapolating this current growth out in time, we see that the state’s economy is not likely to see full job recovery until late 2021 based on existing labor market fundamentals,” Don Klepper-Smith, economic adviser to Liberty Bank, wrote in a note this week to clients. “The odds are that both Connecticut and the nation are apt to be encountering a full-blown national recession prior to full job recovery in Connecticut, which raises serious questions about the state’s fiscal health over the near-term.”

To tackle the lack of economic momentum during his first eight months in office, Democratic Gov. Ned Lamont has touted a platform that focuses on major mass-transit improvements — which he wants to largely fund with a proposed highway-tolling system.

“The No. 1 thing I hear about tolls is ‘I don’t want to pour more money down that government rat hole,’ so it can be used to pay people’s pensions or something like that,” Lamont said of the tolling plan, during a speech in June in Stamford. “I’ve got to double-down and give people 100 percent confidence that every dime (from tolls) goes to transportation.”; 203-964-2236; Twitter: @paulschott