March 11, 2022Updated: March 11, 2022 6:25 p.m.
Connecticut recovered nearly 44,000 jobs in 2021, according to a newly revised average of monthly data published Friday, a significantly larger number than prior surveys suggested, but leaving the state well short of its job count two years ago as the COVID-19 pandemic hit.
The Connecticut Department of Labor reported Friday that businesses, nonprofits and government agencies employed nearly 1.64 million people in December, adjusted for seasonal hiring changes. Across the 12 months of 2021, payrolls averaged just over 1.61 million jobs.
Connecticut payrolls shrank by an estimated 700 jobs in January, if surveys prove accurate, even as employment swelled nationally and in New York.
Connecticut’s yearly average showed a gain of 43,650 jobs from 2020 when employers triggered mass furloughs under public health emergency orders, then began restoring some positions with support from subsidies like the Payroll Protection Program. The final count was about 11,000 jobs more than estimates drawn by DOL from surveys throughout the year. DOL believes those surveys were skewed by varying job actions during the pandemic by business respondents.
Connecticut’s yearly average in 2021 remained about 82,000 jobs short of the total two years earlier. The state saw a slight contraction in jobs in January, both the result of the end of seasonal employment as well as the COVID omicron variant, which may have prompted some employers to wait to fill jobs.
There are two main ways to measure year-over-year job creation using the surveys of a sampling of employers. The first is by using annual averages, which smooth out monthly swings and make comparisons over many years more accurate. In that method, Connecticut’s 43,650 additional jobs in 2021 was revised upward Friday from a preliminary estimate of 32,600 jobs.
Looking at the December-to-December figures, the Department of Labor’s report Friday showed Connecticut’s economy added 55,400 jobs in 2021, up from an earlier estimate of 51,200.
Either way, the state’s economy lost well over 100,000 jobs in the full year of 2020 with the pandemic collapse, even after significant job recovery in the second half of that year.
“We’ve added more jobs than what we had previously thought,” Dante Bartolomeo, commissioner of the Connecticut Department of Labor, said Friday in an interview with Hearst Connecticut Media Group. “This is a public health crisis that created an economic crisis. As omicron is receding, the underlying economy is strong.”
DOL revises its annual estimates each March based on payroll data it receives from employers, with additional revisions possible for the 2021 figures in the coming months as new information is submitted. Patrick Flaherty, who leads economic research for DOL, said the annualized number is useful for gauging long-term economic growth, but can obscure moments of time during the pandemic that have impacted hiring, most notably the successive waves of variants.
Omicron likely contributed to a slight increase in Connecticut’s unemployment rate in January to 5.3 percent, from 5.1 percent in December based on the revised benchmarks. The U.S. unemployment rate was 4 percent in January, with New York’s matching Connecticut’s at 5.3 percent.
Bartolomeo said the coronavirus surge not only impacted workers who had to quarantine, but also working parents in instances when children had to stay home from school after the resumption of classes in January.
“Being able to participate in someone’s job was directly related to the spikes we were seeing in the variants,” Bartolomeo said. “As soon as there started to be talk about omicron coming into the state, I saw it in my daily reports of how many folks were out.”
Employers face a new challenge with the Russian invasion of Ukraine, with the resulting U.S. oil embargo sparking a surge in fuel prices. That is intensifying existing inflationary pressures for many businesses, whether for expensive equipment or everyday supplies — with a possible impact on future hiring as existing budgets are not stretching as far as employers had assumed.
Over the past decade, Connecticut’s job total peaked in December 2018 at just over 1.7 million. The high-water mark occurred in March 2008, when Connecticut employers had 1,720,900 people on payrolls, according to DOL’s official count.
“This is a disappointing start to the year, particularly given the number of private-sector job losses, and further emphasizes how critical it is for policymakers to prioritize job growth,” Chris DiPentima, CEO of the Connecticut Business & Industry Association, said in a statement Friday following the release of the DOL report.
“Our labor shortage is a full-blown crisis — we have 110,000 job openings, yet our labor-force losses since the beginning of the pandemic represent an astonishing 10 percent of the national decline.”
As more businesses return to normal operations, Connecticut faces other challenges beyond those of the pandemic and inflation. Most notably, more workers have retired early. And Connecticut’s high cost of living continues to be a hurdle for younger professionals and new graduates who are weighing opportunities in Connecticut and other states.
For workers in the lowest income brackets, rent and mortgages are putting the squeeze on savings, pushing back by years any expectations for their own retirements.
“There is no discussion of the quality of jobs,” Fred Carstensen, an economist at the University of Connecticut, said in an email. “[Connecticut] gained low-skill, low-wage jobs in tourism, hospitality, logistics and elder care, all of which pay — if working full time — less than $40,000 annually.”
As Connecticut’s population has aged, hospitals and clinics have added staff to handle new services, but the pandemic taxed their capabilities. As of Friday, Yale New Haven Health listed nearly 2,500 open jobs, the highest of any Connecticut employer with postings on the Indeed jobs board.
“The health care sector overall is still below where it was before the pandemic in terms of total employment,” Flaherty said. “Some of that is because there are openings the health care industry would like to fill that they haven’t been able to find people.”
Dan Haar contributed to this report.
Alex.Soule@scni.com; 203-842-2545; @casoulman
