Connecticut Lost Jobs In September, But Gained More In August
Posted to: The Economy, Leisure & Hospital Sector, Manufacturing Sector, Retail Sector, Financial Sector, Trade, Transportation, Utilities Sector, Jobs, Labor
HARTFORD, CT — Connecticut lost 500 jobs in September, according to the U.S. Bureau of Labor Statistics. However, it also revised the August job gains from 2,200 to 3,300 jobs — 1,000 more than initially reported.
“Despite the drop of 500 jobs in September, Connecticut’s labor market appears strong,” Andy Condon, director of the Office of Research for the Connecticut Labor Department, said. “Annual growth increased to nearly 20,000 jobs. Only the trade, information and government supersectors show annual job losses.”
The unemployment rate in September dropped by one-tenth of a point to 4.2 percent.
Donald Klepper-Smith, an economist with DataCore Partners, said the September job numbers are always suspect because they’re the last numbers released before the election.
In 2014, before Democratic Gov. Dannel P. Malloy’s re-election, the numbers showed Connecticut gained 11,500 jobs in one month, which would have amounted to half the job growth for the entire year.
“Never place too much emphasis on the September job numbers, good or bad, as data revisions can, and often do, depict a much different scenario based on better data with a more robust sample size,” Klepper-Smith said. “Therefore, let’s wait until the spring of next year when we receive revised job data for all of 2018 before making judgments.”
Malloy also warned not to put too much emphasis on the short-term.
“While it’s easy to get distracted by short-term gains and losses, doing so risks missing the important bigger picture,” Malloy said. “To date, Connecticut has regained all of the private sector jobs lost during the Great Recession and has now added thousands more. Unemployment has dropped from 9.3 percent in December 2010 to 4.2 percent this month. All this at a time when we made government smaller and more efficient, shrinking the size of the executive branch workforce by more than 11 percent since 2011.”
In 2015, the state of Connecticut added fewer than half the jobs it initially thought in 2015. Adjusted numbers showed the state added 12,200 jobs in 2015, and not the 26,900 jobs initially reported.
“Political spin doctors will inevitably characterize the state’s labor market in a positive context, but even a modest ‘dig-down’ into the jobs data reveals that the state’s engine of economic growth is hitting on ‘two of the six cylinders’ that we have,” Klepper-Smith said. “The latest Real GDP data shows we ranked 49th in economic growth for all 50 states last year. The September data for Connecticut represents a year-over-year gain of 19,900 jobs, or 1.2 percent.”
He said that means “Connecticut’s labor markets still continue to underperform in the larger context.”
“When we lose sight of the significant progress made in our recovery, people become susceptible to false narratives,” Malloy said. “The reality is that businesses and people are not leaving the state in droves. They’re deciding to set down roots and call Connecticut home because they understand that this is a great place to work, live, grow a business, and raise a family. And time and time again, the facts prove this to be true.”
Based on the numbers released Thursday by the Labor Department, Connecticut has now recovered 89.9 percent of the total jobs lost in the Great Recession. It needs 12,000 net new jobs to reach employment expansion. That means Connecticut is not likely to see a full job recovery until sometime in mid-2019.
The state’s private sector continues its expansion and is at 113.9 percent of where it was before the recession.
The government supersector, which includes all federal, state and local employment, including public higher education and Native American casino employment located on tribal land, added 500 jobs in September with over-the-year losses now at 3,500.
Five of the 10 major industry supersectors gained employment in September, while five declined. The trade, transportation and utilities supersector led declines, shedding 2,300 jobs. Leisure and hospitality dropped 1,100 jobs in September after several months of gains. The information supersector continues to struggle, falling by 400 positions, while education and health services fell by 300. Finally, professional and business services saw a small loss of 200 jobs.
The construction supersector led growing industries with 1,000 net new jobs, while financial activities also contributed 1,000 new jobs. Manufacturing grew by 800 jobs. The other services and above mentioned government supersectors both contributed 500 new jobs in September.
It should also be noted that the monthly data from the federal Bureau of Labor Statistics is based on a sampling, rather than an actual count of jobs. Each month the state labor department reports a “preliminary” figure based on the bureau’s data, and then the numbers are revised the following month.
According to CTNewsJunkie’s analysis of the data in these monthly reports, the employment figures reported each month based on sampling during 2017 were overestimated by an average of 3,867 jobs per month, down from an average monthly overestimation of 5,425 in 2016. Thus far over the course of 2018, the sample appears to be underestimating jobs by an average of 438 per month. In 2015, jobs were overestimated by an average of 19,342 per month, or 1.16 percent, and by an average of 3,500 per month in 2014. In 2013, the sample underestimated total jobs by an average of 5,433 per month.
Other economists including UConn’s Fred Carstensen have panned the labor department’s monthly jobs reports for failing to look back to Connecticut’s employment peak in February 1989 for a more complete frame of reference on the economy. Carstensen has frequently suggested that the state should be basing its analysis on a longer frame of reference than just back to the recession of 2008.
Carstensen says Connecticut’s core problem is the absence of job creation dating back to 1989. Since then, Carstensen says, the state had seen only 11 months in which total employment exceeded the previous high.