Connecticut gained 1,000 jobs and its unemployment rate fell to 3.8 percent in January, its lowest point in 17 years and two-tenths of a point below the current U.S. rate. But the state’s jobs gains for 2018 were revised sharply downward in an annual end-of-year review by the federal Bureau of Labor Statistics.
The mix of good and bad employment news was in the monthly jobs report released Friday by the state Department of Labor.
“The January jobs report starts the year on a good note with an increase of 1,000 net new jobs in Connecticut,” said Andy Condon, the DOL’s director of research. “However, the annual benchmark revision process conducted by the Bureau of Labor Statistics significantly reduced last year’s job growth figures.”
The seasonally adjusted growth from December 2017 to December 2018 was originally reported as 19,900 jobs. The revisions nearly halved those gains, dropping the growth to 10,000 jobs. The state now has 1,697,800 jobs.
“If you look at private sector alone, that number is even more sobering. Our earlier gain of 23,100 jobs was revised down to 9,700,” said Peter Gioia, the economics adviser to the Connecticut Business and Industry Association.
Connecticut’s job growth has been measured in fractions of a percentage point: .6 percent in 2018, 0.1 percent in 2017 and 0.2 percent in 2016.
Before the revisions, Connecticut was deemed to have recovered 93.5 percent of all jobs and 117.7 percent of private-sector jobs lost in the Great Recession of 2008. The revised percentage is 84 percent of all jobs and 103 percent of private-sector jobs.
The monthly jobs reports are based on surveys, while the annual revisions are based on a hard count of jobs reported by companies covered by the unemployment insurance system.
“It is near census data — as accurate as can be, but significantly delayed,” Condon said.
The monthly report comes just two weeks after the federal Bureau of Economic Analysis reported solid economic growth in Connecticut in the the third quarter of 2018. With growth of 3.3 percent, Connecticut outperformed half of the U.S.
So, how do the experts reconcile the seemingly contradictory jobs numbers — extremely low unemployment, yet anemic jobs growth?
“Reconciling those is a challenge,” Condon said.
One possibility is that the low unemployment is a reflection of demographics. Connecticut’s population is growing slowly and skews older, and the combination of low unemployment and slow jobs growth may reflect that many job-seekers are taking position available due to retirements, not growth.
“We are getting backloaded in terms of age. There are more people with hair like me than somebody else,” said Condon, who is 65.
The last time the Connecticut unemployment rate was as low as 3.8 percent was in April 2002. It peaked at 9.3 percent in November 2010, before the recovery from the 2008 recession began.