Connecticut unemployment rate steady

Data released Monday by the Department of Labor showed New Haven’s unemployment rate in March was 7.6 percent — higher than both the state and national rates.

New Haven added about 1,000 people to payrolls between February and March, but the size of the labor force and the number of unemployed people increased as well, leaving the percentage of unemployed the same as February’s 7.4 percent. A separate report released by the Department of Labor last Thursday stated that the state’s unemployment rate did not change from February’s seven percent, though Connecticut added 4,900 jobs in March.

Patrick Flaherty, an economist at the Department of Labor, said the increase in jobs is significant nonetheless, especially after weather conditions in January brought economic activity to a halt and caused the state to lose over 10,000 jobs. The fact that job growth continued in February and March despite continued wintry weather was encouraging, he added.

“We’re pretty confident that we’re back on track with a sustainable rate of growth,” Flaherty said.

Nearly half of the jobs in the state were created in the leisure and hospitality sector, with particularly strong increases in hotel and restaurant employment, according to the report. Many jobs in the sector are part-time and low-paying, Flaherty said, spurring concern that the state has yet to recover most high-quality jobs lost to the recession. Employers in the hospitality industry can hire workers relatively quickly to meet demand increases driven by seasonal changes, but adding jobs that pay well is a more long-term challenge, he added.

Steven Lanza, executive editor of The Connecticut Economy, an economics journal published four times a year by the University of Connecticut, said the job increase reflects stronger consumer demand.

“What the growth in the hospitality sector is indicating is that consumers are feeling a little bit more confident, and they’re willing to engage in a bit more discretionary spending than they have in the past,” Lanza said.

He is optimistic that consumer confidence will continue to rise. He predicted that eventually, more spending by consumers could lead to the creation of well-paying jobs in finance and manufacturing — two industries hit hard by the recession. The DOL report stated that Connecticut lost jobs in the information, financial activities and manufacturing sectors over the last year.

Flaherty said that despite differences between cities’ unemployment rates, most areas in the state are growing at about the same pace. He predicts that the state could add 15,000 jobs over the next year and begin to see significant reductions in the unemployment rate.

With just over six months until Election Day, rival candidates in the gubernatorial race offered competing interpretations of the data. Chris Cooper, a spokesman for Republican candidate Tom Foley, criticized Gov. Dannel Malloy’s record on job creation and downplayed the significance of the March data.

“It’s a very modest uptick,” Cooper said. “The people who are responsible for creating jobs know that Connecticut has a bad business environment that only got worse under Governor Malloy’s leadership.”

If elected, Foley would lower taxes and reduce regulation to bring jobs to the state, Cooper said.

James Hallinan, a spokesman for Malloy, defended the incumbent’s economic policies and pointed out that the state has recovered many of the 119,000 jobs lost between March 2008 and February 2010.

“Connecticut has added tens of thousands of private sector jobs since Governor Malloy took office,” Hallinan said, adding, “The governor is not satisfied and he knows there’s more work to do.”

Connecticut’s unemployment rate was last under seven percent in January 2009.

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