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How could Connecticut lose jobs and have a lower unemployment rate?

Connecticut’s labor market is sending mixed signals.  

On the one hand, the state’s unemployment rate fell from 3.9% in March to 3.8% in April; on the other, however, the state lost 2,600 over the past two months with declines of 900 positions in April, while March’s numbers were revised from 1,100 to 1,700 jobs lost, according to a Connecticut Department of Labor (DOL) report. 

Despite the losses, DOL Commissioner Danté Bartolomeo provided an incredibly optimistic spin — in the report ‘Unemployment Rate at a 3-Year Low’ — saying, “The April jobs report highlights the resiliency of our economy. We see broad job gains across industry sectors—healthcare, education, government, professional services, arts, and more. Whether these gains are 100 jobs or 500 jobs, they demonstrate the wide scope of hiring going on throughout Connecticut and are evidence of continued economic stability.” 

While it is true that some sectors experienced “broad gains” of 2,000 cumulative jobs (Education & Health Services, Government, Trade, Transportation, & Utilities, Information and Other Services),. other sectors were not so fortunate. The other five sectors lost 2,900 jobs (Professional & Business Services, Manufacturing, Financial Activities, Leisure & Hospitality and Construction & Mining). 

Yet the unemployment rate still fell. In isolation, it is a good sign that the number of unemployed who were out of work but seeking a job decreased by 3,000 (from 75,300 to 72,300). However, 4,200 people left Connecticut’s labor force — including the 900 who left because they became unemployed. The rationale for the remaining 3,300 is still unknown. 

Workers leaving the labor force could have done so for a host of reasons, such as becoming too discouraged to seek work, entering retirement, going back to school, or even leaving the state. Nevertheless, fewer employed workers mean less income tax revenue going into Connecticut’s coffers, which should give legislators reason to think again about their most ambitious pet projects. 

Long term, Connecticut has recovered 95% jobs lost at the lowest point of the 2020 Covid lockdown (276,000 of 289,100 jobs). This sounds promising until one discovers that New York has recovered 98% of its jobs, while Massachusetts recently surpassed its pre-Covid jobs number, with 16,000 more workers than in February 2020.  

Ultimately, Connecticut’s “economic recovery” continues to resemble economic stagnation — and no amount of optimistic spin can truly masquerade that reality.  

There are a host of ideas Connecticut lawmakers are debating that could either improve or harm the state’s economy. To learn more, visit Yankee Institute’s ‘Take Action’ page here and see our analysis on the ‘Good’ and ‘Bad’ bills.  

David Flemming

David joined Yankee in April 2023 after working for five years as an energy policy analyst at the Ethan Allen Institute in Vermont, becoming a vehement opponent of carbon taxes in all guises. He has a B.A. in Economics from Hillsdale College, is an alum of the Young Voices and Stand Together public policy programs, and served as Executive Assistant for the Booker T. Washington Society. He is an avid Yankees and Celtics fan, board game enthusiast, Toastmaster, science fiction aficionado, live music junkie, casual tennis/ping-pong/dodgeball player and occasional participant in very amateur theater/improv.

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