State unemployment rate falls, yet fewer jobs

Connecticut’s unemployment rate declined by three-tenths of a percentage point to 8.6 percent in December, even though the state lost 1,800 nonfarm jobs last month.

Employment conditions in Connecticut remained unsteady at the end of last year, with the rate of job growth slowing significantly in the final months of 2012, according to preliminary employment estimates produced by the U.S. Bureau of Labor Statistics and released by the Connecticut Department of Labor on Jan. 17. But despite fewer Connecticut residents working, the unemployment rate fell because the number of laborers looking for work also dropped.

The estimates indicate that the state’s private sector employed 1,623,400 in December, down from an employment base of 1,625,200 in the previous month. Last month’s job figure is slightly below the numbers from Dec. 2011, when private sector jobs totaled 1,623,500.

December was the sixth month in a row that the state experienced a decline in the labor force, after a positive first half of the year with five months of growth. Non-farm employment peaked at 1,634,900 in February, the highest since March 2009, but then experienced a downward trend in the following months. While the state’s unemployment rate reached a low of 7.7 percent in March and April of 2012, it later rose to 9 percent in August.

Andy Condon, director of research at the state’s Department of Labor, said in a statement that the state’s trend of a declining labor force was the “primary factor” behind December’s declining unemployment rate.

“With the arrival of the December preliminary jobs report it is apparent that the rate of job growth slowed considerably in the last half of the year,” Andy Condon said. “However, we expect the level of jobs in the state to be revised upward when the benchmark is complete in March.”

According to the Department of Labor, the essentially flat job growth in 2012 is well behind 2011’s total of 7,800 jobs added. Still, Connecticut is recovering from the 2008 economic downturn, with estimates showing that the state has regained 28,700, or 24.4 percent, of the 117,500 total non-farm jobs lost during the recession.

Leading the recovery have been the education and health services sectors, which added 1,600 jobs last year and have accumulated 25,000 jobs since February 2010. But four major sectors of the economy — government, financial activities, manufacturing and mining — have continued to lose jobs.

Three of Connecticut’s major labor market areas exhibited employment declines in Dec. 2012, including the Waterbury area, the New Haven area and the Norwich area. In particular, the estimates released last week show that New Haven experienced a loss of 500 jobs between November and December 2012.

But the Elm City has maintained an upward employment trend in the past three years, said Mark Abraham ’04, executive director of DataHaven, a non-profit organization that compiles and shares public information for the New Haven Greater Area. In 2011, the city employed 78,640, up from 77,080 jobs in 2010 and 76,686 in 2009. During the same time period, New Haven’s suburbs, as well as most Connecticut cities, were suffering from severe job losses.

“This is a phenomenon seen in some other urban centers,” Abraham said. “It may be a sign that jobs are moving back to the city from the suburbs, as employers realize the value of having a younger work force and transportation access.”

But while New Haven is the physical home to many jobs, Abraham said, most of these jobs are held by residents who live outside the city, which explains the high unemployment rates in New Haven.

“While many residents in areas like East Rock or Westville work in downtown New Haven, residents of lower-income neighborhoods like the Hill are much more likely to have to leave the city to find work,” Abraham said.

New Haven’s unemployment rate was 12 percent in Nov. 2012, according to the U.S. Bureau of Labor Statistics.

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