Connecticut Unemployment Rate Inches Closer to National Average
Connecticut’s unemployment rate dropped to 5.4 percent as the state gained 4,100 jobs in July, according to the latest Labor Department statistics.
The unemployment rate for July 2015 was 5.4 percent in Connecticut, which — seasonally adjusted — is much closer to the national unemployment rate of 5.3 percent. It’s a drop of three-tenths of a percentage point from June and has not been this low since May 2008.
“The pace of decline in the state’s unemployed has accelerated in the last three months,” Andy Condon, Director of the Labor Department’s Office of Research, said. “This has brought Connecticut’s unemployment rate to a level nearly identical with the U.S. average.”
After a sluggish June, the job gains in July were also significant.
“This is the third monthly nonfarm job gain in a row, signifying a fairly strong summer so far,” the Labor Department said in a press release.
Connecticut’s private sector added 3,000 jobs this July. The government supersector also contributed to job gains in July by adding 1,100 positions. Connecticut has now recovered 102,000 positions, or 85.7 percent of the 119,000 seasonally adjusted total nonfarm jobs that were lost in the state during the March 2008-February 2010 employment downturn.
The private sector, however, has recovered 97 percent of the jobs lost during the recession. Another 3,400 private sector jobs or 17,000 total non-farm jobs need to be created to reach pre-recession levels.
“Jobs are dramatically up, the unemployment rate is significantly down, and we’re on track to reach private sector job levels that the state hasn’t seen since before the Great Recession,” Gov. Dannel P. Malloy said in a press release. “But we cannot — and will not — stop here. We are going to continue fighting for more good paying jobs with good benefits as we engage with companies like never before. This report is another step into the future for Connecticut.”
But Don Klepper-Smith, an economist with DataCore Partners LLC, isn’t as optimistic about the future as Malloy.
He said the July job numbers are “considerably above expectations” given the national data. However, Klepper-Smith said he’s concerned about the state’s ability to grow jobs in the future mostly because of the new state budget adopted in June and the unitary reporting tax, which goes into effect in January 2016.
“I now expect to see considerably less job creation in Connecticut relative to my prior projections because business confidence in state government has clearly taken a hit in recent months,” Klepper-Smith wrote in an email. “A true hot-button issue going forward, I believe, is the proposed unitary tax on corporate profits, which will have a major impact on the state’s economy if and when it happens. This tax would allow state government to tax operations on subsidiaries of state firms who operate primarily outside of Connecticut.”
Klepper-Smith said the state’s “increasingly antagonistic policies” toward business will hurt it in the long run.
“In my view, competing states are now licking their chops at the prospect of luring key manufacturing jobs out of Connecticut and we’re headed down the wrong path,” Klepper-Smith wrote. “My strong sense is that we’ll see more major employers leaving the state over the next few years for greener pastures elsewhere, joining the ranks of others who have already announced, or made the move.”
Senate President Martin Looney and Senate Majority Leader Bob Duff defended the state budget decisions and say the latest report shows their policies have been working.
“Today’s jobs report reinforces what we already knew to be true; Connecticut’s economy continues to make steady progress,” Looney said. “Connecticut’s economic development policies are helping businesses create jobs and the state’s job training programs like STEP-Up are preparing workers for a 21st century economy. There’s more work to do but this is extremely positive news.”
Duff added: “The fact remains that Connecticut is great place to live, work and raise a family. We have a great quality of life and a talented, educated workforce which is why companies are hiring our residents.”