CT economy adds nearly 26,000 jobs in May, after losing 269,200 in April

Economist Don Klepper-Smith, right, speaks during the Greater Danbury Chamber of Commerce's 2018 Economic Forecast Breakfast in Danbury, Conn.

Connecticut’s economy added 25,800 jobs in May as businesses across the state began reopening after being shut down to prevent the spread of coronavirus, officials with the state Department of Labor said Thursday.

Seven of the 10 employment sectors tracked by state officials saw job gains, led by the leisure and hospitality industry, which added 9,400 jobs. The trade, transportation and utilities sectors added 5,100 jobs.

“Connecticut saw the beginnings of recovery of the historic job losses in April caused by the COVID-19 pandemic,” Andy Condon, director of the Office of Research at the state Department of Labor, said in a written statement. “The process of recovery may quicken as Connecticut implements its phased response to the slowing spread of the virus.”

News of the May jobs growth was tempered by the downward revision of April employment numbers for the state.

Connecticut’s historic loss of 266,300 jobs in April has been changed to reflect 269,200 people being put out of work during the month.

Joe Brennan, president and CEO of the Connecticut Business & Industry Association, said the job growth in May represents a recovery of just 10 percent of the jobs lost in April.

“That speaks to the breadth of the damage the pandemic is doing to our economy and the impact it is having on hundreds of thousands of Connecticut residents and families,” Brennan said in a written statement. “It was encouraging to see gains, however modest, in the leisure and hospitality, trade, services, and manufacturing sectors.”

The three employment sectors in the state that posted job losses last month were government, information and financial activities. Government employment levels were down by 4,700 jobs in May while 1,300 were put out of work in the information sector.

The government employment sector includes all federal, state and local employment, as well as public education and workers at Native American casinos located on tribal land.

Connecticut’s unemployment rate in May was 9.4 percent, but state labor officials said number is likely closer to 19 percent because of data collection and misclassification issues associated with the gathering of the information. The national jobless rate was 13.3 percent.

But Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners, cautioned against reading too much into the state’s employment gains in May.

“It's extremely premature to get excited because this is not likely to be the start of a prolonged upward trend,” Klepper-Smith said. “Rather, I expect the (Connecticut) economy to experience the full effects of recession over the next six to nine months with further job losses, fiscal instability, rising out-migration, declining tax revenues, and general economic deterioration.”

Brennan said there is a need for greater collaboration between the private and public sectors to both mitigate the pandemic’s impact.

“If we don’t change our thinking and adopt new approaches, many of these jobs may never return to Connecticut,” he said. “That means focusing on promoting and driving private sector growth by adopting policy measures that will incentivize investment and job creation.”

Five of Connecticut’s six Labor Market Areas added jobs in May, led by the Hartford region, which added 9,200 jobs. The New Haven area added 2,600 jobs while the Bridgeport-Stamford-Norwalk region added 2,100.

Only the Waterbury area saw a decline in employment last month with a loss of 200 jobs. The Labor Market Area covers nine communities, including Bethlehem, Watertown and Woodbury in Litchfield County.

Connecticut Media Group