Job Gains, But Mixed Economic Picture as Connecticut Heads into Cooler Months

Unemployment numbers across southeast Connecticut lag the rest of the state

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Employment data released yesterday by the Department of Labor show that while Connecticut continues to regain jobs lost during the pandemic, the overall economic picture remains mixed according to a variety of industry officials.

The 17,000 non-farming jobs gained in September is less than in previous months. The state saw the resurgence of a total of 21,900 non-farming jobs in August and 32,300 jobs in July. 

Additionally, while the U.S. Bureau of Labor Statistics places Connecticut’s employment rate at 7.8 percent, down from 8.1 percent in August, the Office of Research at the Connecticut Department of Labor said this is an underestimate. Their estimates place the unemployment rate in the state between 12 and 13 percent. 

Eric Gjede, vice president of governmental affairs at the Connecticut Business and Industries Association, said they had been hoping that the job gains that had occurred in the first few months since the pandemic would continue. 

“It’s great to see us moving in the right direction,” said Gjede, “We wish it was moving much quicker.” 

Gjede said he was particularly concerned about the slowdown in the aerospace industry. Pratt and Whitney announced last week that it would be cutting an additional 450 jobs in the state because of reduced business. 

Peter Denious, director of Advance CT, said that while he had not seen many businesses leaving Connecticut, the great migration of businesses from Manhattan to Connecticut that many people had hoped for has not happened either. “There’s way too much uncertainty still,” said Denious. 

However, Denious said he remains “cautiously optimistic,” adding that compared to other states, Connecticut’s numbers look good. 

Restaurants, Retail and Hotels

The data shows that hospitality and leisure experienced the greatest increase in jobs, with 6,900 more jobs compared to last month. 

But Scott Dolch, executive director of the Connecticut Restaurant Association, said he fears that these numbers may reverse once the cold weather forces outdoor dining to shut down. 

“It’s a great sign,” he said of the increase, “But I don’t think it tells the whole picture of what we’re going to be faced with come November and December.”

Ginny Kozlowski, executive director of the Connecticut Lodging Association, said she thinks that many of the jobs created in the summer months were connected to outdoor activities, like kayaking and leaf-peeping, which will not be able to continue through the winter months. 

Kozlowski said the hotels in Connecticut were operating at around 47 percent capacity right now, and that a smaller clientele meant that hotels needed to hire a smaller staff. While the move to phase 3 will allow hotels to host small gatherings, the cancellation of activities like business trips, college sports and on-campus college tours was hurting business. 

Other sectors that have seen increases are professional services, government jobs, manufacturing, transportation, education, health care and information. 

Finance, insurance, real estate and construction and mining have all seen decreases in jobs. 

Patrick Flaherty, director of the Office of Research at the Department of Labor, said in a statement that retail trade is more than 70 percent recovered. 

Tim Phelan, president of the Connecticut Retail Merchants’ Association, said he estimates that sales are back to between 70 and 80 percent of pre-COVID levels. He said that some retailers, like malls and clothing stores, are still facing challenges.

Additionally, Phelan said that retailers are gearing up for a very different holiday season this year. He said he thinks stores may begin promotions earlier in order to avoid big crowds close to the holidays. He’s not sure, however, what effect that will have on the hiring of seasonal employees. 

Southeast Connecticut

The Norwich-New London area was one of the four regions with an increase in jobs this month— 900 non-farming jobs were regained in September. However, data shows that the region remains at nearly 11 percent fewer jobs than it had in September of 2019, the largest percentage gap of any region in Connecticut.  

State Sen. Norm Needleman, D-Essex, said he wasn’t surprised by the fact that the southeast was “lagging behind.” 

Both Needleman and State Sen. Paul Formica, R-East Lyme, said that the slower recovery in the southeast region has to do with the fact that the casinos, Foxwoods and Mohegan Sun, have not fully reopened. Both have chosen to remain at 25 percent capacity. 

Formica said he believed the economy, once reopened, would bounce back from this downturn much more quickly than in 2008. The underlying economy, he said, was much stronger than it was 10 years ago.  

Gjede, however, thinks there is more the state could do to speed up the job gains. 

“There are a lot of little things, first steps we could be taking,” he said, adding that one example would be making it easier for people to use out-of-state licenses and restoring the pass-through entity tax, which gives businesses credit against their Connecticut income tax, to its 2019 levels. 

Denious said the best thing people can do to help the economy is to frequent small local shops. These businesses, particularly those owned by minorities and women, have been hit particularly hard. 

“People are just not back supporting those businesses, and that’s what we need to do as a community,” he said. 

Needleman said he saw the opportunity to support small businesses as a silver lining of the pandemic, since fewer people were traveling long distances. 

On the whole, Needleman and Formica said, the state had done a good job of balancing COVID precautions with the needs of the economy. 

“I’ve said all along that safety and security is paramount,” said Formica. He added that as the economy was beginning to reopen, businesses and the economy would have to be trusted to do the right thing.

“We have a long way to go to normalize, but I think Connecticut has done a good job keeping as much as possible open,” said Needleman.

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