A decade of employment growth was erased in April

Businesses slashed hundreds of thousands of jobs

A decade of employment growth in Connecticut was erased in April as businesses cut a staggering 266,300 jobs in response to the coronavirus that forced widespread shutdowns, the state Department of Labor reported Thursday.

With a revision to 22,100 lost jobs in March from 7,600 posted initially, Connecticut’s labor force shrank 17% in two months, to 1.4 million from nearly 1.7 million.

The official unemployment rate more than doubled since March, to 7.9%, though the Labor Department said due to data collection and sampling problems the rate is “severely

underestimated” and is closer to 17.5%.

“We’re talking about job losses of epic proportions,” Labor Commissioner Kurt Westby said on a conference call with reporters.

The U.S. jobless rate in April was 14.7%, and federal labor officials announced Thursday that 39 million Americans have applied for unemployment benefits in the last two months.

In just one month, the number of jobs wiped out in Connecticut approached the number lost in the last two downturns of 1989-1992 and 2008-2010 when about 270,000

jobs vanished.

The unprecedented loss of jobs in April was more than double the 102,800 jobs created in the decade between January 2010, as Connecticut’s labor force emerged from the Great Recession, and February, the last month before the coronavirus began its sweep.

“What remains to be seen is how many of these jobs were suspended and will return when public safety permits and how many were permanently lost,” said Andy Condon, director of research at the Department of Labor.

Brian Kench, dean of the Pompea College of Business at the University of New Haven, said opening small businesses, which are significant job creators, is key to slowing the pace of unemployment. If the public health crisis extends a year or longer, many small businesses may be insolvent, he said.

The Wednesday opening of restaurants, retailers and other businesses in Connecticut was an important step, Kench said.

“It’s the first gate that opens for many small- and medium-sized businesses that can turn the revenue spigot back on,” he said.

Unemployment insurance claims that have topped 500,000 are beginning to decline, Westby said.

Economist Donald Klepper-Smith said that does not necessarily translate into a quick recovery. Connecticut, he said, is at a “distinct disadvantage heading into the recession” because its economy and labor force have grown slowly since the end of the

Great Recession.

By February, the state recovered fewer than 86% of lost jobs.

“In context, the April job numbers represent an ‘economic tsunami’ the likes of which the state has not seen before, and policymakers simply don’t have a playbook for dealing with a job losses of this magnitude,” Klepper-Smith said.

All industries saw significant declines, but the hardest hit included leisure and hospitality, retail, education and health services. All were the first victims of business shutdowns ordered by the state to slow the pandemic.

No industry or region was spared in the rush to cut jobs. Reductions affected trade, transportation and utilities; manufacturing; construction and mining; financial activities and all other industries.

All six labor market areas shrank in April, with the Hartford region losing the most jobs, 75,500, down 12.9%.