Jobless rate drops as state slowly recovers

Employment reaches 1.6 million, the highest since start of pandemic

Connecticut’s unemployment rate dropped to 7.3% in July as the state has now recovered two thirds of the jobs lost during the sharp downturn that began with the arrival of the pandemic in March 2020.

The Connecticut Department of Labor said the state added about 9,400 jobs in July, pushing total employment to 1.6 million statewide — the highest since March 2020.

Overall, Connecticut has recaptured 67% of the positions that were lost at the worst point of the pandemic last year. That includes about 196,000 of the 292,000 jobs originally lost.

Seven of 10 employment sectors gained jobs in July with the strongest improvement in construction as the industry gained 1,500 jobs or 2.7%. Information jobs were up 1.5%, and government jobs were up 1.3%, the department reported. Leisure and hospitality gained 1,000 jobs or 0.8%.

Some sectors showed continuing employment losses, including financial activities, where positions were down by 600 jobs and manufacturing, which decreased by 200 jobs.

Since February 2021, unemployment filings have been dropping, officials said. The state currently has about 130,000 weekly unemployment claims, compared to 400,000 in May 2020 and 220,000 in February 2021. When the economy was

particularly strong before the pandemic, the unemployment filings were about 40,000 per week, which is one-tenth of the highest total.

“Sixteen months after a global pandemic created an unprecedented economic lockdown, Connecticut’s economy and job market are showing strong and consistent signs of recovery,’’ said Dante Bartolomeo, a former Democratic state senator from Meriden who is the department’s interim commissioner. “As child care capacity increases, schools go back into session and vaccinations continue, more workers are entering the job market. Some are finding higher-paying jobs, some are making major career changes. It’s a job seeker’s market, and the timing works well with the end of federal programs approaching on Sept. 4.”

Small business owners have complained repeatedly that they have had a hard time hiring employees in recent months, partially because workers at certain wage levels can earn just as much or more money from the federal unemployment benefits than from holding a job. Some restaurants and small businesses have closed, citing severe difficulty in finding qualified workers.

Despite various concerns, the overall employment picture has improved in recent months, said Patrick Flaherty, an economist who serves as director of the department’s research office.

“Jobs are up nearly 30,000 since December while the unemployment rate has fallen 1.2% points in just five months,’’ Flaherty said. “This recession was caused by a public health crisis. The economic recovery we are seeing is faster than usual because the public health crisis recovery is well underway.’’

Some of the sectors that suffered the most at the bottom of the pandemic — hotels, restaurants, and retail stores — “have now recovered more than 70% of the jobs lost,’’ Flaherty said.

“We have work ahead of us, but this is good progress,’’ he said.