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Connecticut Unemployment Rate Hits 8.8 Percent

JANICE PODSADA

November 20, 2009

Last month was a one-year anniversary of sorts for Tony Keldo of New Britain. But the father of three wasn't celebrating: October marked his 12th month of unemployment. Keldo has been jobless since October 2008 when his position at DHL US Express in West Hartford was eliminated.

A year later, layoffs remain common. Connecticut's unemployment rate jumped to 8.8 percent in October from 8.4 percent the month before, even though employers added 1,000 jobs last month, according to a report released Thursday by the state Department of Labor. Nationally, the unemployment rate is 10.2 percent.

The gain of 1,000 jobs is statistically insignificant and doesn't do much to erase September's revised job loss total, which was 6,200.

"October was a relatively warm month. Two of our big gainers last month were construction and recreation. Those kinds of companies were able to work much longer into the season," said Salvatore DiPillo, the state's labor statistics supervisor.

Since peaking in March 2008, the state's economy has lost 85,400 jobs, or 5 percent of its employment base, said Don Klepper-Smith of DataCore Partners Inc. in New Haven, chairman of the governor's economic advisory council.

Klepper-Smith expects the state will lose another 15,000 jobs, even though "technically, the recession is over because the gross domestic product numbers turned positive in the third quarter of this year."

"But you're not going to see any robust job growth any time soon," said Klepper-Smith. For the 12 months ending in October -- 12 long months since Keldo was laid off -- the state has lost 71,100 jobs, the Labor Department reported.

Since then, the former tractor-trailer driver has canvassed the help-wanted ads. "I've applied for everything," he said. "Nobody is hiring. It seems like most companies are afraid of hiring."

Keldo's situation is hardly unique. Of the 15.7 million Americans who are currently jobless, nearly 36 percent, or 5.6 million, are among the long-term unemployed, those who've been without work for six months or more.

University of Connecticut economists say if a strong national economy continues through the next six months, the state could soon post modest job gains. If America's recovery lags, the state could lose another 25,000 to 35,000 jobs

In its latest quarterly report, scheduled for release today, the Connecticut Center for Economic Analysis says that while economic growth will continue at a slow pace, national unemployment will continue to increase through the first half of next year.

The report (available at tinyurl.com/yf3mwjg) highlights a disturbing trend: While unemployment for production workers is slowing, the layoff rate for scientists and engineers who are typically responsible for the development of new products, is accelerating. Their diminishing presence in the workforce could compromise the nation's competitiveness, according to the report, titled "Will Job Losses End? A Thin Ray of Hope."

Keldo's unemployment benefits and his wife's job have kept the family together so far, Keldo said. The state's jobless workers are eligible to receive up to 93 weeks of unemployment benefits, under an extension approved by Congress earlier this month. But that could jump to 99 weeks. Under the extension, states whose jobless rate averages 8.5 percent over three consecutive months are eligible for an additional six weeks of benefits. The state's current three-month average is 8.43 percent, DiPillo said.

A ray of hope flashed next door and to the north Thursday when Massachusetts reported that its unemployment rate dropped for the first time in two years, from 9.3 percent in September to 8.9 percent last month.

"Looking across New England, you're starting to see fewer initial jobless claims -- that's usually an indication of the overall job trend," said Klepper-Smith, commenting on the decrease in Massachusett's jobless rate.

But Klepper-Smith predicts that Connecticut's unemployment rate will continue to climb.

"I expect we'll see 9 percent before this is over," he said.