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Connecticut Unemployment Remains Elevated Despite Some Job Gains

  • Despite national downward trend in unemployment rate, Connecticut jobless rate remains persistently high
  • State economists say part of elevated rate may be due to statistical misclassification, but that the state’s economy is likely to remain fragile this fall
  • Circumstances could drive further support for “sin tax” revenue when state legislature reconvenes

The jobless rate in the United States has gradually fallen in recent months as businesses shuttered by the COVID-19 pandemic have reopened, but Connecticut’s unemployment levels have remained stubbornly high. However, this figure may be the result of a statistical anomaly since Connecticut has shown improved jobs numbers during the summer.

Connecticut’s unemployment rate briefly peaked near 15 percent in the spring before falling to 8.3 percent, but it has gradually risen since than and stood at 10.2 percent in July. This matched the national unemployment rate for the month, though the U.S. rate has been on the decline and fell to 8.4 percent in August; Connecticut’s rate for that month has not yet been released.

A state labor economist suggests that Connecticut’s elevated unemployment rate may be driven in part by misclassification since some people who were excluded from unemployment tallies were once again included. The state has seen an increase in its labor force and fewer residents receiving jobless benefits since the spring.

The state has still not recovered all of the jobs lost during the pandemic and is likely to experience an annual decline in jobs this year. Connecticut’s economy also remains fragile going into the fall due to factors like restaurants heading into their slow season after a summer of diminished revenues. This has prompted a set of state funding programs to assist residents who are struggling due to COVID-19, and some state legislators suggest there will likely be more calls for recreational marijuana legalization, sports betting, and other ways of boosting “sin tax” revenue.

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