New federal job data reveals dim prospects for Connecticut as it struggles to lift itself out of recession.
After 14 months of steady job gains, the state economy battled a rough summer — Connecticut’s August labor statistics, released Thursday, reported the biggest one-month unemployment increase in 36 years on top of job losses in June and July. According to the U.S. Bureau of Labor Statistics (BLS), which compiles economic data at the national, state and municipal levels, Connecticut lost 6,800 non-farming jobs between July and August, pushing unemployment up from 8.5 to 9 percent. The 0.5 percent jump is the largest monthly unemployment rate increase since 1976, when the current BLS methodology was first established, and puts Connecticut well above the national average of 8.1 percent unemployment for August.
The data also indicated that the state’s civilian labor force included 1.9 million people in August, down 9,400 from July.
The state’s leisure and hospitality sectors experienced the largest losses, as over 3,100 jobs disappeared in August. Education and health services posted the largest gains, with 500 jobs added.
But while the new BLS employment figures point to large job losses, Connecticut officials have questioned the accuracy of the data given other state employment indicators.
“Both [the BLS and Connecticut Department of Labor] labor statistics programs point toward employment losses in Connecticut … However, to date we can find no corroborating evidence that the record losses in employment are occurring at this magnitude,” said Andy Condon, director of the Office of Research at the Connecticut Department of Labor. “We continue to monitor the situation carefully and are working closely with the BLS to investigate every possibility.”
Condon said other economic indicators such as unemployment insurance claims, layoff events and reports of business expansions and contractions have not been reported in sufficient quantity to “support the sudden and steep decline” in state employment figures.
Gov. Dannel Malloy issued a statement on Thursday expressing similar skepticism of the federal labor data. He noted that the number of people filing for unemployment benefits declined between August and July — with average weekly filings reaching 4,802 and 4,779 people in July and August, respectively.
“Those two trends are the opposite of what you would expect to see if the state was losing jobs at the rate suggested in this report. However, I am well aware that we continue to battle strong headwinds at the national and international levels,” Malloy said. “And I’ve said time and again that we’re not going to reverse 22 years of job stagnation in 20 months.”
The summer job losses come after very strong employment gains during the winter and early spring months of the past year. According to Alissa DeJonge GRD ’00, director of research at the Connecticut Economic Resource Center, mild winter weather at the time allowed construction projects across the state to begin earlier than usual.
Those added construction jobs helped fuel seven months of consecutive employment gains earlier this year. The Department of Labor reported that unemployment in Connecticut dropped from 8.6 percent in September of 2011 to 7.7 percent in April.
“There was no real, lasting frost this year, so we were able to start post-winter work a bit early,” said Ivan Sachs, owner of Connecticut-based Cherry Hill Construction. Sachs added that he was able to employ 50 people earlier last winter given the milder weather.
DeJonge added that on a national level, one additional factor causing unemployment to fall earlier in the year was that some of the unemployed gave up on searching for jobs, exiting the labor market and thus not counting as unemployed. She said Connecticut’s workforce is smaller than it was one year ago, but added that the number of discouraged workers quitting their job search is difficult to track accurately.
While the new data paints a bleak picture for the state’s economy as a whole, similar figures have not yet been made available for the Elm City. The BLS is scheduled to release its metropolitan area employment data for August 2012 on Oct. 3.
City Hall spokeswoman Elizabeth Benton ’04 said that with the dispute over the accuracy of the BLS data, the city “is not yet fully prepared” to comment on where its unemployment rate stands.
The New Haven unemployment rate has climbed from 10.9 percent in April 2011 to 13.6 percent in July 2012.