As CT jobless rate jumps, officials say it finally reflects reality

Connecticut’s unemployment rate went above 8% in November.

Connecticut’s official unemployment rate, as calculated by the federal government, jumped by more than two percentage points to 8.2% in November, a number that state officials said Thursday finally begins to reflect the economic damages of COVID-19.

Having an 8% percent unemployment rate average over three months is the threshold for the extension of unemployment benefits by seven weeks, but Gov. Ned Lamont said he expects a new federal COVID stimulus package to bring quicker and more substantive relief.

Connecticut businesses could expect $300 million in direct aid under the package he hopes will be passed in Congress on Friday, providing a much-needed jolt of help as a resurgent COVID-19 pandemic depresses consumer confidence, he said.

“I think the federal government stepping in is going to be very helpful early in the New Year when it comes to economic impact,” Lamont said.

Lamont said the state’s economic health will be a reflection of its public health. If infections drop, he expects to see consumer confidence rise — as it did during the summer as federal help arrived and infections were low.

“If we’re careful during the holidays, I think you’ll see confidence slowly building again,” Lamont said. “Maybe it’ll take a month or so, but I think we’ll get back to where we were just a few months ago in terms of that confidence.”

The state reported 2,321 new infections and 46 deaths on Thursday, while hospitalizations fell by 49 to 1,205. Vaccinations at nursing homes are to begin Friday, starting with five facilities. In the first week of the vaccine’s availability, the state received 31,600 doses.

With no help expected for state and local governments in the next stimulus bill, Connecticut is releasing $45.5 million in federal COVID aid to cities and towns to help cover pandemic related costs since July 1. The state has previously provided $14.5 million.

The state also is using $50 million in federal COVID money to provide grants of $5,000 to 10,000 small businesses, plus another $25 million to slightly larger businesses. Both sets of grants are intended to be modest bridges to anticipated direct federal aid.

The November jobs numbers posted Thursday are the first since April to show job losses.

Connecticut economists estimate the actual unemployment rate is between 9% and 10%, down from about 11% last month. But the official rate for the state was 7.8% in September and 6.1% in October.

The unemployment rate is based on monthly survey data gathered by the federal Bureau of Labor Statistics, not actual jobless claims filed weekly at the state Department of Labor.

“I don’t think the federal government knows what the unemployment rate is,” Lamont said. “We have a much better handle on that.”

One issue especially relevant during COVID is that the official jobless rate does not reflect losses to gig workers and other self-employed, he said.

The November report issued Thursday still is an undercount, but it is getting closer to reflecting an accurate picture of the unemployed population in Connecticut, the state Department of Labor said in its summary.

Patrick Flaherty, acting director of research for the state DOL, said there is no disagreement among statisticians about the quality of data. The larger question for policy makers is the wisdom of using a single data point to decide if the unemployed get extended benefits.

“In the big picture, all the data this year has been telling the same story,” he said. “We had a COVID pandemic that hit Connecticut pretty hard in March and April. We bounced back, then very recently, we had a slowdown.”

The public and private sectors lost 1,600 payroll jobs in November, the first drop since the widespread layoffs in response to the COVID-19 lockdown were reflected in the April report.

“Federal government employment fell by 1,000 jobs as temporary Census work ended,” Flaherty said. “In addition, the ongoing COVID-19 pandemic has led to a decrease in leisure and hospitality where accommodation and food service lost a portion of last month’s gains. 

“Offsetting these declines, transportation and warehousing, which includes delivery services, grew in November and now employs more people than one year ago.”

Private sector jobs decreased by 700. Compared to November 2019, the sector was lower by 79,800 jobs.

“The virus continues to have an impact on the economy,” said Kurt Westby, the state labor commissioner. “The higher COVID rates this fall caused closures and a pause in economic activity; these unemployment numbers generally reflect what people are seeing in terms of curtailed dining and retail.”

Westby said the availability of a vaccine could help with an economic recovery.

“It’s important to mention that the economy is showing an underlying resilience that bodes well for recovery once the vaccine is widely distributed and people can re-engage in their activities,” he said.