Unemployment is rising, according to the Connecticut Department of Labor (CTDOL) May Labor Situation Report.
The report, which was released on Monday, June 22, found that unemployment was at 5.1% in May, one-tenth of a percent more than it was in April. Last May, unemployment in Connecticut was at 3.8%.
The national unemployment rate is 4.3%. This is the fifth month in a row that Connecticut’s unemployment rate has surpassed the national rate.
“We are concerned at the long-term, structural weaknesses in Connecticut’s job market, as these reports continue to highlight,” said CBIA president and CEO Chris DiPentima in a press release. “The state’s labor force—those working and actively looking for work—fell by nearly 12,000 people in May. In the last 12 months, nearly 38,000 people have left the labor force, which is now 1.7% below pre-pandemic levels—in stark contrast to growth in the rest of the country.”
At the State Economic Update in May, Office of the State Comptroller Economist Michelle Parlos stated that the rise in unemployment is driven by new people entering the workforce who are trying—and failing—to find jobs.
“A shrinking labor force is not just a jobs issue—it’s an economic growth issue and a competitiveness issue,” DiPentima continued in the press release.
According to the CTDOL, private sector jobs decreased by 800 from April to May. The total number of private sector jobs was still 8,400 higher than last May. The report only focuses on non-farm jobs.
“Connecticut has grown to be one of the more expensive states in the country. A lot of that is policy-driven,” CBIA Director Dustin Nord told Inside Investigator. “It has to do with housing policy, it has to do with tax policy, it has to do with tax policy that has not necessarily been able to keep some of the higher-paying businesses… and then at the same time made it somewhat more expensive in order to live here. So it’s sometimes policy that’s working against on both sides of that.”
DiPentima told Inside Investigator that legislators did not address two of the most significant expenses that Connecticut residents have to grapple with: the public benefits charge, which contributes to high electric bills, and the rising cost of healthcare in the state.
“In recent years, we’ve seen considerable wage growth on the private sector side, but the fact that it hasn’t been able to keep up with some of the other costs that we’ve seen grow in the state. I think it’s indicative of some of the challenges associated with the cost of living in Connecticut,” Nord said.
The report did identify some positive trends in the market.
“While some months have been stronger than others, Connecticut has added over 7,000 jobs so far this year and total jobs are at an all-time high,” Director of the Office of Research at the CTDOL Patrick Flaherty said in the most recent labor report.
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