While national job growth has weakened, growth in Connecticut is stable, albeit low, according to new numbers released Thursday.
Employers in the state added 900 jobs in August according to the latest jobs report, which tracks trends in the state’s labor market and is released monthly by the Connecticut Department of Labor. The report also notes that the previous month’s jobs numbers are better than initially reported, with the state gaining 800 jobs in July rather than the 700 it first reported.
Connecticut’s unemployment rate, meanwhile, remained at 3.8% for the fourth month in a row. That’s lower than the national unemployment rate, 4.3%.
In a press release announcing the jobs report, state labor commissioner Danté Bartolomeo said the numbers suggest that on some economic measures, Connecticut is faring better than the nation more broadly. “Despite volatility in the national numbers, Connecticut’s economic indicators remain steady,” Bartolomeo said.
Other members of the department agreed. “Connecticut continues to see stable, sustainable growth,” said CTDOL Director of Research Patrick Flaherty. “Private sector payrolls hit new highs last month and total jobs — public and private sector — are only off their 2008 all-time high by about 700 payroll jobs.”
Still, the jobs report arrived at a moment of heightened economic uncertainty, both nationally and in Connecticut. And after a weaker summer jobs performance than expected nationally, the latest jobs numbers suggest that even with fairly stable growth, Connecticut, like other states, is facing some economic headwinds.
A persistent labor force problem
While the jobs numbers suggest a somewhat steady state for job growth a different figure — focused on the state’s labor force as a whole — tells a different story.
The labor force participation rate is used to measure how much of the working-age population in a place are actively working or looking for employment. The number is related to, but different from, the unemployment rate, which generally tracks people who are not working but are actively searching for a position. Labor force numbers, some economists argue, are a better indication of labor conditions.
Connecticut’s labor force participation rate is currently 64.6%, slightly higher than the national rate of 62.3%.
But the jobs report notes that Connecticut is continuing to see a decline in its labor force overall, as retirements rise and working-age adults move away from the state or leave the labor force for other reasons.
In August, the state’s labor force declined by 4,100. From June to August the state’s labor force declined by 10,300. A shrinking labor force can be a concerning economic indicator: if the effects are prolonged, fewer available workers can create a problem for employers and limit economic output more broadly.
This issue isn’t isolated to Connecticut, but when coupled with the state’s high cost of living and stagnant population growth that is primarily offset by international migration, the numbers are raising concerns locally.
“The labor force numbers are really concerning, with the population of those working or looking for work down 4,100 people last month alone and 12-month growth essentially flat,” Chris DePentima, president and CEO of the Connecticut Business and Industry Association, said in a statement released Thursday afternoon.
And slow job growth coupled with a declining labor force could also suggest a deeper weakening in the economy. In recent months, a number of reports have suggested that Connecticut is dealing with a persistent affordability and cost of living crisis, with families and workers noting that it is becoming more difficult to navigate life in the state.
Businesses are also feeling the squeeze, according to a recent CBIA survey, business owners are reporting dealing with rising costs and a shortage in available workers.
The national economy is also showing warning signs
The latest state jobs report comes as economic uncertainty continues to be felt across the country, with that uncertainty now being supported by recent jobs data.
Last week, the Bureau of Labor Statistics, which tracks jobs and other related data across the country, released a preliminary report finding that national hiring numbers from March 2024 to March 2025 were overcounted by more than 900,000 jobs.
While the annual hiring numbers are usually revised, and the final numbers won’t be released until next year, the size of the recent revision was unusually large, drawing considerable attention and renewed criticism from President Donald Trump, who has previously accused the BLS of politicizing and manipulating jobs data.
The president fired the head of the BLS in August, arguing that the jobs data released that month (which showed the economy added just 22,000 jobs) “were RIGGED in order to make the Republicans, and ME, look bad.” The former agency head, Erika McEntarfer, has disavowed that argument, maintaining that her role was nonpartisan in nature.
When the jobs revision came out earlier this month, the White House said in a statement that “the economy President Trump inherited was even weaker than we thought,” adding that “job growth was lackluster under Biden.”
Concerns over the economy have intensified in recent months, as businesses continue to navigate shifting federal policies on immigration, a reduction in the federal workforce, and changes in tariffs and trade policy. Slower than expected job growth, the news of some job declines, and more job seekers than available positions in the labor market are adding to those concerns.
The weakening labor market has led to efforts to stabilize the economy. The Federal Reserve cut the federal funds rate this week, and has signaled that it may reduce rates further in the coming months in the hopes of boosting the economy.