Jobless rate drops
After cracking the 8 percent barrier in October, the unemployment rate in lower Fairfield County dipped to 7.5 percent, with the county region possibly adding a few hundred jobs in November.
The statewide unemployment rate similarly dropped, from 8.8 percent in October to 8.2 percent in November, despite Connecticut losing 2,600 jobs. The U.S. unemployment rate fell 2 basis points to 10.0 percent.
In Westchester, Putnam and Rockland counties in New York, the unemployment rate was 6.7 percent, down from 7.1 percent in October, while New York City”™s unemployment was 10 percent, down from 10.2 percent.
“Lower unemployment rates and fewer unemployed people are not necessarily signals of better economic times,” said Salvatore DiPillo, statistics supervisor for the Connecticut Dept. of Labor, in a written statement. “If people are not seeking work, then they are not counted among the labor force, and do not figure into the unemployment rate. A consistent positive sign we have seen, however, is the steady decline in the number of initial unemployment claims, with November”™s total down by 8.8 percent from last year.”
Posting the biggest month-over-month gain was the health care and social services sector, which statewide gained 1,300 jobs between October and November. Smaller increases were recorded in information technology and retail as stores ramped up for the holiday shopping season.
On a year-over-year basis, the arts, entertainment and recreation sector has enjoyed the best recovery, with jobs up 3.8 percent from a year ago.
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Construction employment remains 15.1 percent below its levels a year ago, while administrative support service jobs like waste collection were down 10.1 percent.
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The question becomes whether the drop in unemployment is a blip or the start of a trend, and if the latter, how long it will take Connecticut to regain the jobs it has lost in the recession.
To test the factors that have the biggest influence on economic resilience, a University of Connecticut economist recently used the 2001 recession as an experimental lab of sorts, gathering data on each state”™s recovery from that downturn and on state characteristics that could plausibly explain the rebounds.
In the 2001 recession, the typical state lost 2.7 percent of the jobs it had at the peak of the previous business cycle, and took 50 months to regain the jobs it had at that point.
Connecticut, by comparison, lost 3.6 percent of its peak job base, and took 85 months to get them back.
“Business leaders, policymakers and job seekers alike complain that Connecticut is slow to recover from recessions, especially where jobs are concerned,” said Steven Lanza, executive director of the Connecticut Center for Economic Analysis, which is affiliated with the University of Connecticut. “Their frustration should come as little surprise. Connecticut suffered relatively steeper job losses than many other states in the 2001 recession, which was a relatively modest slump. That not only made recovery a taller order for us; it also reduced the state”™s pool of skilled human capital from which it could draw during the upturn.”
Lanza said the state”™s modest construction record in the most recent upswing left it in a poor position to ride the homebuilding boom that followed the 2001 recession.
“That fact may now offer some consolation during the current, housing-induced economic collapse,” Lanza stated.
Connecticut may also be hobbled by a relatively small government financed with high tax rates; by a comparatively unequal distribution of income; and by its snow belt locale that may deter workers or businesses preferring warmer climates, Lanza said.