Employment data revisions bad news for state economy

Connecticut’s economy added 1,000 new jobs in January — good news — but revised employment data for 2018 and prior years showed a gain of nearly 10,000 fewer jobs than originally had been reported, state Department of Labor officials said Friday.

The December 2018 gain, which was reported as 1,100 new positions, remained unchanged, even with the revisions. But the number of total jobs did change as a result of an annual benchmark revision done by the federal Bureau of Labor Statistics.

The new figures showed what originally had been reported as an increase of 19,900 jobs in 2018, dropped to a gain of 10,000 workers when looking at December-to-December totals. The December total was 1,696,800 jobs at Connecticut employers, down from a previously reported 1,705,500.

The new data is based on actual payroll reports; the earlier figures, reported monthly by the state and federal labor departments, are based on surveys of businesses.

In another way of looking at the data, using annual averages, Connecticut’s total fell from a previously reported 16,000 added jobs to a gain of 2,200. The annual averages smooth out the ups and downs during a year.

Either way, said Andy Condon, director of research for the state Department of Labor, the rision process “significantly reduced last year’s job growth figures.”

“These revisions replace monthly sample-based job estimates with more accurate, but time delayed values from our Quarterly Census of Employment and Wages,” Condon said in a written statement.

The state’s unemployment rate remains unchanged at 3.8 percent even with the revision, he said. The national unemployment rate fell to the same level, 3.8 percent, in a separate report Friday, which showed weak national job creation.

Some Connecticut economists are saying the revised employment numbers are concerning.

Pete Gioia, an economic adviser with the Connecticut Business & Industry Association, said initial reports showed the state was on track for its best year for jobs since 2006. But once the revisions are taken into account, Gioia said 2018 ended “a lot different than we thought we would.”

“If you look at private sector alone, that number is even more sobering,” Gioia said in a written statement. “Our earlier gain of 23,100 jobs was revised down to 9,700.”

In the December-to-December view, Connecticut’s economy saw 0.6 percent job growth in 2018, up from 0.1 percent in 2017 and 0.2 percent the year before that, he said.

The revision dealt a setback to the state’s economy getting back all of the jobs it lost in the last recession. Connecticut has recovered just 84 percent of lost jobs and must gain another 19,300 to meet pre-recession levels.

“We need to create a state where businesses are growing and investing, and it needs to be lawmakers’ top priority,” Gioia said.

Donald Klepper-Smith, chief economist and director of research for New Havenbased Data Core Partners, said the revisions suggest that “the current [economic] expansion may well have peaked in 2018.”

“The odds of a formal recession in 2019 are now a 50-50 proposition,” Klepper Smith said. “Risks to the current business cycle categorically lie to the downside, an exclamation point being provided by today’s morbid job growth. This shows all the signs of a classic economic downturn.”

Given its current pace, he said the state’s economy is not likely to see full job recovery until sometime in mid-2020.