State can’t catch break on jobs

Connecticut just can’t catch a break on economic growth.

Just when we thought we had an uptick in job creation, a new revision hit on Friday showing the gain of 6,500 added jobs in 2019 — reported by the Department of Labor in monthly tallies — was really a loss of 2,100 for the year.

In one update, we went from what looked like a decent gain — a 0.4 percent climb, but the state’s best year since 2015 — to Connecticut’s first year of annual losses since 2010. That was the end of the recession.

This time around, we’re supposedly in a growth mode, and we’re one of a very small handful of states showing a net loss for the year. So what gives?

Friday’s revision, which happens every March, is wholly unrelated to the coronavirus crisis, as it measures jobs in

2019. The crisis, of course, will bring more headaches to this and all other states and all nations, in ways that no one can predict.

Unemployment remains low in the state, 3.7 percent, statistically the same as the rest of the nation, so that’s not a problem at all. No, Connecticut’s worry is how to expand with more jobs in the private sector, as we can’t seem to gain any traction.

“It’s not good, and the question is why,” said Andy Condon, director of research for the state Department of Labor, which did the revision as an arm of the U.S. Department of Labor.

The answers to that big question are, in a way, comforting.

No one can say for sure what’s happening with Connecticut’s seemingly anemic economy, which basically went nowhere throughout the last decade. But there are signs the awful job numbers are not as bad as they seem.

First, a weird thing is happening with the government surveys, Condon pointed out. The survey of employers, from which the jobs numbers are drawn, show little or no gains for Connecticut. But the surveys of households have consistently shown gains in the range of a full 1 percent each year — a healthy jump.

That means either Connecticut is home to a growing number of self-employed people, or a growing number of people working from home at out-of-state employers, or a growing number of

people working in New York and Massachusetts.

We have reason to believe all three of those categories are growing, which would mean the state’s economy is not as bad as the revisions would seem. Residents working out of state pay income taxes where they work, but they spend money and pay property taxes here.

“We’ve had a surge since 2013, it’s about 90,000 more residents are working out of state,” UConn economist Fred V. Carstensen said Friday. “It’s better to have Connecticut residents employed than unemployed.”

Backing up that theory, that the job totals don’t show the whole picture, are income gains and total economic growth measures for 2019 that don’t point to a shrinking of the economy.

Another consolation in he numbers: Most of the downward revision was for the first half of 2019. By the summer, Connecticut showed momentum.

And in Connecticut, the labor department released figures for January of this year, which showed a gain of 2,600 jobs, to a level of 1,696,100. The year-overyear gain was 7,800, back to solid positive territory.

That number is subject to revisions in March, 2021, and the revisions have been downward every year for the last six years — meaning we should figure out what the problem is, or stop reporting those monthly numbers and raising false hopes.

For now, the state is back below the psychological threshold of 1.7 million jobs, a barrier that the preliminary data showed Connecticut crossing in November for the first time since 2008.

The new revisions track a similar update last fall for the nation as a whole — about one-half of 1 percent of the total number of jobs. Hundreds of thousands of jobs we thought the U.S. economy had created vanished overnight — but the hit wasn’t as bad because the nation is creating jobs at a healthy clip.

“Across the country, growth rates are slowing down,” Condon said.

That said, on Friday the U.S. Department of Labor issued a report that February job gains hit a whopping 275,000, one of the biggest gains since Donald Trump became president three years ago.

I’m using seasonally adjusted annual averages. Other methods show different numbers but we’re behind, no matter how we slice the pie.

One final hopeful note for 2019: Manufacturing showed a small gain of 1,300 jobs, just under 1 percent, after the revisions — which moved the gain upward from 900 jobs before the revision. That maintains a recent stabilization and growth in factory work, led by the defense contractors.

But the coronavirus effect on the economy will be significant and could lead to a full-blown recession with tens of thousands of job losses in Connecticut.

That, not the loss of jobs in 2019, will be Gov. Ned Lamont’s economic development concern going forward — even as the job loss gives him a bad first year when the data had showed the state heading in the right direction.

All in all, a mixed picture, not as bad as the headline number suggests.