Connecticut’s job growth streak continued in July, marking the seventh consecutive month of employment growth in the state. According to the Department of Labor’s monthly employment report, Connecticut added a net 700 jobs in July, bringing the total number of private sector jobs to a record high of 1,476,600. This represents a 0.1% increase in private sector employment.
One of the positive aspects highlighted in the report is the 4.5% increase in private sector wages over the past 12 months. However, the consumer price index also rose by 2.9% during the same period, indicating a potential challenge for workers in terms of maintaining their purchasing power.
Despite the job growth, Connecticut experienced a decline in its labor force for the second consecutive month, with 5,600 people dropping out of the workforce. This resulted in a slight decrease in the state’s labor participation rate, which now stands at 64.4%, ranking 19th in the country. The unemployment rate in Connecticut fell to 3.6% in July, although it remains the second highest in the region and the 28th best among all states.
One of the key concerns highlighted by CBIA president and CEO Chris DiPentima is the mismatch between the number of job openings and the available workforce. Connecticut currently has 93,000 job openings, which is 33% higher than pre-pandemic levels. DiPentima emphasized the need to address this issue to ensure that businesses can meet the demand for their products and services.
Connecticut’s labor force has 23,300 fewer people than it did in February 2020, before the pandemic hit. This contrasts with other New England states like Rhode Island, Vermont, and Massachusetts, which have seen growth in their labor forces since that time. DiPentima attributed Connecticut’s challenges to its high cost of living, driven by factors such as high taxes, energy costs, housing expenses, and childcare costs.
In terms of job recovery, Connecticut has regained 105% of the 298,300 jobs lost during the pandemic shutdowns in March and April of 2020. While this is a positive sign, the state’s year-over-year job growth rate of 1% ranks 38th in the country, below the national average of 1.6%. Vermont leads the region with a 2.3% growth rate, indicating stronger job market performance.
In July, employment increased in four of Connecticut’s 10 major industry sectors, with other services leading the way by adding 1,300 jobs. Professional and business services, education and health services, and information sectors also saw gains. However, the government sector experienced a decline of 1,200 jobs, along with decreases in financial activities, manufacturing, construction, and leisure and hospitality sectors.
Among the state’s six major labor market areas, New Haven and Waterbury posted job gains in July, while Hartford-West Hartford-East Hartford saw a decline in employment. Overall, the job market in Connecticut continues to show signs of recovery, but challenges remain in terms of matching job openings with the available workforce and addressing the state’s high cost of living. Efforts to align the education system with employer needs and expand opportunities for underserved populations are crucial for sustaining and enhancing job growth in the state.