Connecticut no longer has higher unemployment than the nation as a whole, a new report said Thursday.
The state’s seasonally adjusted unemployment rate was estimated at 5.4 percent in July — statistically indistinguishable, because of the small sample size, from the national rate of 5.3 percent.
The state’s unemployment rate has not been this low since May 2008, the report from the Connecticut Department of Labor said.
Connecticut employers added 4,100 jobs in July, and, in the first seven months of 2015, added 17,900 — a substantially faster pace than the same period in 2014, when 12,400 jobs were created in Connecticut.
The state still has fewer jobs than it did when the recession began, but the labor market is showing multiple signs of strength. The number of unemployed fell by more than 5,000 from June to July.
As recently as March, the state’s rate was nearly a full percentage point higher than the national rate, 6.4 percent compared with 5.5 percent. Although the rate is subject to revisions, the trend seems clear.
The volume of layoffs in Connecticut is also far lower than during the recession. The month’s average initial unemployment claims for each week was 3,799 — the lowest in more than 15 years.
Wage growth is starting to indicate a labor market in which the balance of power is shifting to the job-seeker’s favor, as well, as average hourly wages grew significantly faster than inflation over the year. The report did caution that the number fluctuates, as sometimes large employers drop in and out of the survey.
“It’s translating into our really substantial wage gains. This is really, really good,” said economist Nick Perna, an adviser to Webster Bank.
But he did place a note of caution on the wage figures. He said no one expects inflation to stay so low — it’s running at 0.2 percent, largely because of the drop in oil prices — and if it returns to normal, annual wage gains of 2.9 percent won’t look so strong.
Overall, the private sector — which does not include the state’s suffering Native American casinos — is 97 percent of the way back to where it was before the recession hit.
Gov. Dannel P. Malloy issued a statement that said, “This is good news — our state should recognize the progress we’re making. Jobs are dramatically up, the unemployment rate is significantly down, and we’re on track to reach private sector job levels that the state hasn’t seen since before the Great Recession.”
But Perna cautioned that the effects of what lawmakers had to do in Hartford to close the budget deficit aren’t hitting the economy yet.
He said the economy has momentum, and jobs are growing fairly rapidly — a better starting place for tax increases and state spending cuts than usual. Still, he’s concerned about shoes that could drop.
“Is it only hot air that GE talked to [Gov.] Cuomo?” he asked, referring to discussions between General Electric and New York’s governor about moving GE’s corporate headquarters out of Connecticut. Bloomberg reported this week that GE is also considering Atlanta or Dallas.
The decline in the unemployment rate has been strong enough this summer that the state Department of Labor laid off 95 employees, the result of falling federal reimbursement related to joblessness.
It’s a good monthly report, Perna said, “but I don’t think it disproves the fact that Connecticut has some fairly serious competitive issues … It also has some very serious PR issues.”
