Economists Call Attention To Latest Job Numbers
HARTFORD, CT — Connecticut’s largest business organization said lawmakers need to pay close attention to the latest monthly employment report.
Wednesday’s report from the Connecticut Labor Department — based on a sampling of data from the federal Bureau of Labor Statistics — showed the state lost 1,500 jobs in April and it revised March’s job gain downward to a smaller gain of 600 jobs.
“This report should be setting off alarm bells at the state Capitol,” CBIA economist Pete Gioia said. “Connecticut continues to trail the region and the country in job and economic growth.”
Gioia said job growth must be the guiding principle for lawmakers as they work to resolve the state’s $5.1 billion budget deficit.
“It’s imperative that the state’s budget rebuilds confidence to create solid business investment that leads to jobs here in the state. The two are intertwined,” he said.
He said Connecticut “can’t expect to add jobs and grow the economy without solving our fiscal issues.”
Connecticut has only added 5,500 jobs since April 2016, which is the slowest year-over-year growth of the New England states.
New Hampshire leads the region with 1.8 percent job growth over that period, followed by Massachusetts at 1.6 percent, and Rhode Island at 1 percent. The U.S. added jobs at a 1.5 percent rate over the last 12 months.
“Connecticut is a serious outlier,” Gioia said.
Connecticut has recovered 74.7 percent of the total jobs lost during the recession, also the slowest recovery in the region. However, that includes the government sector of the economy. The state’s private sector has recovered 92.7 percent of the jobs lost during the recession. Only 8,200 new jobs are needed to reach a full private sector recovery. The government supersector has lost a total of 21,900 positions since the recession started in March 2008.
The state’s unemployment rate rose one-tenth of a point in April to 4.9 percent, highest in the region. However, Andy Condon, director of the Office of Research, wasn’t discouraged by the figure.
“For the fourth month in a row we have seen small increases in the unemployment rate accompanied by larger increases in the labor force,” Condon said. “This continues to indicate that workers are entering or rejoining the labor force and many are finding work.”
The U.S. unemployment rate is 4.4 percent.
Don Klepper-Smith, an economist with DataCore Partners, said the only way Connecticut can get out of its current fiscal crisis is to cut spending.
“It behooves us to take tough measures now to reign in state spending. Why? Because key state spending metrics clearly show we’ve overcommitted relative to our economic development policies and our ability to generate economic growth,” Klepper-Smith said. “It’s that simple!”
He said taxing Connecticut residents more isn’t going to improve the state’s revenues.
None of the four budget proposals released over the past few days propose an increase in sales or income taxes, even though they include other revenue generating ideas like an increase in the real estate conveyance tax and legalization of marijuana.
“An objective assessment of aggregate economic data clearly argues for spending cuts as opposed to tax increases, and it will be very interesting to see how budget talks progress in coming months,” Klepper-Smith said.
Malloy is expected to have an assessment of all the budget proposals completed by today.