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State Unemployment Rate Improves, But Jobs Lost

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STEPHEN SINGER
AP Business Writer

HARTFORD, Conn. (AP) — Job creation stalled in Connecticut in September and October as employers nervously watched the federal government shutdown and budget impasse in Washington, the state Labor Department said Thursday.

Still, the state’s unemployment rate fell to 7.9 percent from 8.1 percent in August, the first time since April 2009 the rate was below 8 percent. The U.S. unemployment rate in October was 7.3 percent.

Connecticut’s unemployment rate is down a half-percentage point since October 2012 and nonfarm jobs have increased by 10,000, or 0.6 percent, over the year. It’s a sharp drop from the 9.4 percent level where it remained stuck in late 2010 in the immediate aftermath of the deepest recession in decades.

But Don Klepper-Smith, an economist who advised former Republican Gov. M. Jodi Rell, said the 0.6 percent increase is less than half the national average of 1.7 percent.

“This speaks volumes as to the pace of overall economic recovery in Connecticut,” he said. “Today’s numbers were a big disappointment, with a capital D.”

Nonfarm employment fell by 4,100 in September. The job declines “point to increased hiring uncertainty and a drop in confidence” at the approach of Oct. 1 when the federal shutdown began, the Labor Department said.

Jobs were down by 100 in October — essentially flat — as the federal shutdown ended mid-month. The private sector added 1,000 jobs in October despite the slight decline in overall nonfarm jobs.

In addition to a range of federal health, housing and other programs that took financial hits with the shutdown, Connecticut is home to a strong aerospace manufacturing base, making the state’s economy sensitive to military spending cuts.

Andy Condon, director of the research office, said the September and October reports send mixed messages about the state’s labor markets.

“The weeks leading up to the federal government shutdown, evidently, led to increased economic uncertainty and hiring indecision across the state,” he said. “On a positive note, the state’s unemployment rate has declined for two months in a row primarily driven by a reduced number of unemployed individuals.”

The state issued the statistics for the two months combined because the shutdown delayed the September release scheduled for October.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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