State adds 14,100 jobs in Oct., but COVID recovery weakens
Connecticut’s gain of 14,100 jobs in October marked a sixthstraight month of increased employment, but the preliminary data released Thursday by the state Department of Labor also showed that the recovery rate is weakening amid the second wave of the coronavirus crisis.
With last month’s increase, the state has now regained about two-thirds of the 291,000 positions it shed during the COVIDrelated shutdowns in March and April, a toll equal to more than double the number of jobs lost in the state’s 2008-10 recession.
But the monthly gains are shrinking, the data shows. The labor department also reported Thursday a revised September job increase of 18,000. The state gained nearly 22,000 positions in August, 32,000 in July, 77,000 in June and 28,000 in May.
The hiring boom in late spring and early summer was catalyzed by the first and second phases of the state’s economic reopening.
“In October, we generally saw a continuation of the progress we’ve made in the past few months,” Chris DiPentima, CEO and president of the Connecticut Business & Industry Association, said in an interview. “But continued caution is needed. One, we had a very warm October, and two, our COVID test positivity then was in the 1 (percent) to 2 percent range… Now, we’ve got positivity in the 5 (percent) to 6 percent range.”
Amid the job gains, the rate of unemployment declined for a third-straight month. The official unemployment rate listed in the October report, 6.1 percent, compared with 7.8 percent for September. Last month, the national rate ran at 6.9 percent.
Experts agree, however, that the official jobless rate — which is based on a household survey — significantly understates the actual unemployment level. In October, Connecticut’s unemployment rate, in fact, ran at about 11 percent, labor department officials estimated.
The number of added jobs — based on a survey of employers — is also a preliminary number and subject to major revisions even in more stable times. During the
coronavirus crisis, the numbers might be even less reliable because employers, for instance, might have workers on short-term furloughs that are changing quickly.
Widespread gains, lingering uncertainty
Last month, private-sector employment increased by 11,200 positions — equal to a 0.8 percent gain— to about 1.38 million jobs. Its headcount was down 5 percent year over year.
The government workforce increased by 1 percent — or 2,900 positions— to about 224,000. It lagged its October 2019 total by 6 percent.
Nine of the 10 major industries in the state grew their workforces. Trade, transportation utilities and leisure and hospitality led with respective increases of 4,400 and 3,600.
Construction and mining was the only sector to lose jobs last month, with a decline of 400.
“This report highlights the resiliency of the restaurant industry,” Patrick Flaherty, the labor department’s acting director of research, said in a statement. “Among the hardest hit during the pandemic, restaurants are coming back and have gained more than 70 percent of the jobs lost over the past seven months. People will always want to go out to eat, so it’s likely that the industry will fully recover.”
DiPentima said he was encouraged by the hiring in the leisure and hospitality sector, but still concerned about locally owned businesses in that sector and others such as retail. Employment in every sector is lower than a year ago.
“People need to recognize that this is a time when those local businesses — restaurants, retailers and everyone else — really need our help,” he said. “I really advocate for people to shop local.”
The extent to which Connecticut can continue to create jobs in the coming months will hinge on how it fares in its containment of COVID-19. The state’s infection rate has jumped from the 1 percent to 2 percent range about a month ago to around 5.6 percent in the past week. Hospitalizations have also surged, with 840 in the state requiring in-patient care for coronavirus-related illnesses as of Thursday.
In response to the virus’ resurgence, Gov. Ned Lamont earlier this month rolled the state back to a “Phase 2.1” of its reopening, after it had entered a third stage on Oct. 8.
Unemployment drop reduces benefits
The declining unemployment moves the state out of a High Extended Benefits period by bringing its threemonth average jobless rate below 8 percent — a federal threshold that authorizes an additional seven weeks of benefits to claimants of unemployment insurance and Pandemic Unemployment Assistance. PUA covers individuals such as self-employed workers who are not eligible for regular unemployment compensation or extended benefits.
Connecticut’s High Extended Benefits activated in August when its three-month average unemployment level was running above 8 percent.
State labor officials expect the U.S. Department of Labor to notify them shortly that the High Extended Benefits period has ended. As a result, during the next few weeks the state labor department will inform the claimants who will begin to lose those benefits.
In Connecticut, about 188,000 people are now collecting unemployment assistance. The labor department also reported this week that it has received nearly 1.1 million applications for such aid since March 13.