Connecticut adds jobs for fifth month; unemployment rate drops to 6.7%
Published 2:18 pm, Monday, July 21, 2014
Connecticut added 1,700 non-farm jobs last month, pushing the unemployment rate down to its lowest level in more than five years and suggesting the state is on a steady, albeit painstakingly slow, march toward economic recovery.
The data released Thursday from the state Department of Labor showed June's total employment of 1,667,400 marked a new recovery high. The state has now had five straight monthly job increases in a row, amounting to a total of 5,300 new jobs to date this year. As a further reason for optimism, May's gain was revised to the higher figure of 6,000 from the original estimate of 5,700.
The jobless rate in June was 6.7 percent, down slightly from 6.9 percent in May. It has not been this low since December 2008.
Steven Lanza, an economics professor at the University of Connecticut, said the latest job growth figures exceeded his forecast. Although the increase in June was modest compared with May, he said there have been signs that long-term unemployed workers who had intentionally sidelined themselves are now actively job-searching again, a turn of events that would tend to elevate the unemployment rate.
That the jobless rate actually fell in June "suggests the job growth rate was sufficient to absorb some of the folks coming back in," he said.
However, in his monthly newsletter, Don Klepper-Smith, who serves as an economic adviser to Farmington Bank, described the June employment figures as "essentially lackluster" in light of strong national job growth last month in which the U.S. added 288,000 new jobs, and saw the unemployment rate fall to 6.1 percent.
He noted that compared to last year at this time, Connecticut job growth is up only 0.3 percent.
Klepper-Smith likened following the state's progress to "watching paint dry."
To date, Connecticut has regained 73,500 positions, or 61.7 percent of the 119,100 seasonally adjusted total nonfarm jobs lost during the downturn between March 2008 and February 2010.
Nationwide, in addition to the healthy job increases for June, there is reason to suggest that the tide may be turning on what has otherwise been a sluggish recovery.
The number of Americans filing new claims for unemployment benefits fell last week by 3,000 to a seasonally adjusted 302,000, the Labor Department said Thursday.
In Connecticut, jobless claims were down by 1,135.
The four-week national average, a less volatile measure, dropped 3,000 to 309,000, the lowest level since June 2007, about five months before the start of the Great Recession.
Applications for unemployment benefits are a proxy for layoffs, a sign that they expect economic growth to continue. When businesses are confident enough to keep staff, they are also likely to hire more people.
Hiring is at its healthiest clip since the late 1990s and the 6.1 percent national unemployment rate is at a 5½-year low. Employers added 288,000 jobs in June, the fifth straight month of job gains above 200,000.
Still, the steady hiring gains have yet to boost wages significantly. Wage growth has barely matched inflation since the recession ended five years ago.
But more people with jobs increases the total number of paychecks, which could boost consumer spending and growth. After a sharp contraction in the economy in the first three months of the year, most economists expect growth to return in the April-June quarter and exceed 3 percent at an annual pace in the second half of 2014.
The Associated Press contributed to this story.
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