On Thursday October 15, Yankee Institute held an online forum with four renowned economists who discussed the current and future state of both Connecticut’s economy and the national economy in the wake of the COVID-19 pandemic and the economic downturn. Below is a series of slides created by Chief Economist ...
Connecticut lost twice as many jobs in April as it gained in 10 years
Staggering employment numbers released by the Connecticut Department of Labor show that during the month of April, Connecticut lost twice as many jobs as it created in 10 years, putting the state back on its heels just when its economy was showing signs of life.
The 2008 Recession saw a loss of 119,000 jobs, and Connecticut had only recently regained those loss jobs in the private sector and never fully regained the job decline in the government sector.
However, due to the COVID-19 pandemic and the closure of businesses across the state, Connecticut posted a loss of 266,300 jobs in the month of April alone.
The combined loss of jobs between March and April is 288,400 and the CT DOL has received 535,000 applications for unemployment to date, equal to 31.4 percent of the state’s workforce.
The private sector was hardest hit, posting a loss of 246,400 job losses with half of the losses coming from the leisure and hospitality sector, which includes restaurants, retail, entertainment venues and hotels.
Government sector jobs fell by nearly 20,000 jobs.
There was no sector of Connecticut’s economy that wasn’t affected by job losses, including the financial services and information sectors. The Hartford area was the hardest hit, according to the DOL.
“Connecticut and the nation saw a rapid and unprecedented level of job loss in April due to the pandemic,” wrote Andy Condon, director of the Office of Research. “All industries saw significant declines, but the hardest hit included leisure and hospitality, retail trade and education and health services. 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.”
Donald Klepper-Smith, chief economist for DataCore Partners LLC and former economic advisor to Gov. M. Jodi Rell, said the numbers are “breathtaking,” adding up to 98 percent of the total job loss of the last two recessions combined in just one month.
“Barring an immediate cure or vaccine for the coronavirus, this one-month job decline for April implies not only a harsh new economic landscape for Connecticut, but one that is apt to leave scars on the local economy and its residents for months and years to come,” Smith wrote.
Although many are hoping for a quick turnaround in the economy, Smith cautions that this may not play out.
“Yes, we all would love to see a ‘V’ shaped recovery where the regional economy rebounds quickly, but the economics and mathematics involved say there is little chance of that happening,” Smith said.
Smith said that’s because consumer lifestyles have changed, help for small businesses has been slow resulting in bankruptcies and that with increased unemployment payments there may be less incentive for individuals to return to work during the pandemic.
Connecticut had been struggling economically for the ten years following the 2008 recession, posting low economic growth, job growth and personal income growth.
The state also labored under repeated budged deficits despite raising taxes in 2009, 2011 and 2015.
Connecticut’s failure to recover the jobs lost during the 2008 recession place it “at a distinct disadvantage heading into the recession,” Smith wrote.
The Connecticut DOL warned that that Bureau of Labor Statistics’ information should be considered “inaccurate.”
“Data collection and misclassification issues in the Current Population Survey, the foundation of the state’s residential labor force statistics, caused residential unemployment to be severely underestimated,” the DOL posted on its website.
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