State sees signs of job growth begin to slow

Connecticut’s economy added 17,000 jobs in September, as unemployment continued to drop, but the preliminary data released Monday by the state Department of Labor shows that the recovery during the coronavirus crisis is slowing.

As the state recorded its fifth straight month of job increases — equating to a 1 percent uptick in September — the leisure and hospitality, retail, government, and professional and business services sectors did the most hiring. The state has now recouped about 60 percent of the 291,000 positions it shed in March and April, a toll that more than doubled the number of jobs lost in the state’s 2008-10 recession.

At the same time, the monthly gains are shrinking. The labor department also reported Monday that the originally calculated August job increase was revised upward by 1,500, to a total of 21,900 jobs. In comparison, the state picked up about 32,000 jobs in July, 77,000 in June and 28,000 in May. The surge in late spring and early summer was driven by the launch of the first and second phases of the state’s economic reopening.

“It’s always good to see jobs gains. But the growth is certainly slowing,” Eric Gjede, vice president of government affairs for the Connecticut Business & Industry Association, said in an interview. “We’re still in a pretty tough spot. We would like to see a lot of these jobs come back much quicker.”

As the job gains continued, unemployment dropped again. The official unemployment rate listed in the labor department’s September report, 7.8 percent, decreased 0.3 percentage points from August. It compared with a national rate of 7.9 percent, which dropped from 8.4 percent in August.

Experts agree, however, that the official jobless rate — which is based on a household survey — significantly understates the actual unemployment level. In midSeptember, Connecticut’s unemployment rate, in fact, ran “in the range of” 12 percent to 13 percent, labor department officials estimated.

The number of added jobs — based on a survey of employers — is also a preliminary number and subject to significant revisions even in more stable times. During the coronavirus crisis, the numbers might be even less reliable because employers might have workers on short-term furloughs that are changing rapidly.

In Connecticut, about 232,000 people are now collecting unemployment benefits, with the labor department reporting last week that it has received more 1 million applications since March 13, when Gov. Ned Lamont enacted a publichealth emergency that shut down many businesses across the state.

Last month, private-sector employment increased by 14,700 positions — equal to a 1 percent uptick — to about 1.36 million jobs. Its headcount was down 6 percent year over year.

The government sector’s workforce also increased by 1 percent — or 2,300 positions in total — to about 226,000. It lagged its September 2019 total by 5 percent.

Seven of the 10 major industries in the state increased their headcounts last month.

Leisure and hospitality led with a gain of 6,900. But pandemic-sparked shutdowns have resulted in a 19 percent year-over-year drop in employment in the industry, which includes restaurants, hotels and performing arts venues.

Next came professional and business services, which added 4,300 positions. Its employment has decreased 3 percent in the past year.

Trade, transportation and utilities — which includes retail — gained 2,000 posts. Employment in the sector has shrunk 5 percent year over year.

Gjede was also encouraged by the 1,500 jobs added in manufacturing, although its headcount has dropped by 4 percent in the past year.

“We have been hearing about the impact of the slowdown in the aerospace industry, so we will continue to monitor that into the October job report,” he said. “That’s one we are concerned about given the importance of manufacturing to the state.”

Three sectors lost jobs last month. Financial activities and the “other services” sector dropped 700 positions, while construction and mining lost 500.

Every major industry employed fewer people last month than it did a year ago.

The extent to which Connecticut can create jobs in the coming months will hinge on how it fares in its containment of COVID-19.

Connecticut’s recovery will also depend on other factors such as if or when Congress can agree on another round of stimulus funds.

“Connecticut businesses certainly could use a little bit of short-term help, and another stimulus, if Congress would act, would be great,” Gjede said. “But in the long term, it’s really going to be Connecticut lawmakers who make the choices that impact the business community.”