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Connecticut’s Job Market Turnaround?

by MARA LEE

June 20, 2013

Connecticut’s private employers added 2,400 jobs in May, and net employment growth was 1,000, one of several pieces of good news in the jobs report released by the state Department of Labor on Thursday.

April’s jobs tally was revised upward by 100 jobs, to 6,400, and the number of jobs in the state has grown by an average of 2,140 jobs each month since the beginning of 2013.

If that pace continues through the rest of the year, 2013 would be a quite strong year in the state’s job market — the best year since 1997.

“That’s really good news,” said Fred Carstensen, head of the Connecticut Center for Economic Analysis at UConn. “It does make me modestly more optimistic about the performance of the state economy.”

If job growth continued at this pace, in 20 months the state would recover all of the private sector jobs it lost in the recession.

The unemployment rate, which is measured by a separate, smaller survey, remains at 8 percent.

Andrew Smith, 23, is one of the people who went from unemployed to employed in May, when he was hired as a security guard by Securitas, a multinational corporation that provides security guards to companies and governments. He guards a factory in Meriden, and makes between $10 and $11 an hour.

Smith, who graduated from Mitchell College in New London a year ago with a degree in criminal justice, said he’s relieved to be working after five months of looking, even though this wage is lower than the $13.50 he made at his old job selling valves. He lives with his parents in Berlin.

This job falls in a category of business services that’s been the second fastest growing sector in the last year, after construction. The category also includes temporary agencies.

The fact that this sector and restaurants and hotels, which are dominated by fairly low-wage jobs, are two of the three strongest sectors is a dark cloud in what’s generally a sunny report.

Finance and insurance, one of the most important industries for Connecticut, continues to contract, with 600 fewer workers than in April and 2,600 fewer than a year ago.

Wages are still falling, down 11 cents an hour over the year for all private sector employees, and down $2.44 hourly for manufacturing production workers.

Carstensen said that drop in wages in manufacturing is a very striking decline, and is absolutely a consequence of a glut of workers compared to the number of openings. There are 3,500 fewer durable goods manufacturing jobs in the state than there were a year ago, and 1,300 fewer than in April. That’s the second largest decline on a percentage basis of any sector.

“It’s really good that we’re seeing persistent, consistent recovery,” he said, but added that the quality of new jobs is not what he’d like it to be, “which is reflected especially in those manufacturing wages.”

Cuts at school districts, towns and cities continue to be a drag on the economy, as there were 1,400 fewer jobs in the local government sector at the end of May than at the beginning. But Carstensen said the state budget problems were resolved in a way that will not make the economy worse.

Another positive in the jobs report was that the size of the labor force in the state increased for the first time in three years. That means not only more residents are working, but that more people are choosing to look for work rather than go to graduate school, stay home to care for relatives or give up on trying.

“This may be a sign that improved prospects in the labor markets this spring are bringing out more job seekers,” the report said.