Connecticut Lost Jobs in 2016, But January Showed Improvement

The Connecticut Department of Labor Friday reported that Connecticut had its worst job growth of the last seven years as government cutbacks swamped private sector growth.

The state’s economy finished 2016 with 200 fewer jobs than it had at the beginning of the year, according to the state Department of Labor. The private sector added 4,100 jobs over the year — an increase of 0.3 percent — while government shrank by 4,300 positions because of cutbacks made in response to a persistent state deficit.

The data, released Friday, reconciles survey data from October 2015 through September 2016 with actual payroll records, and relies on a jobs survey for the last three months of 2016.

The report also included estimates for January’s job growth, which was stronger. The report says that across all employers, there were 5,700 more jobs, seasonally adjusted, in January compared to February.

Connecticut’s economy stands in contrast to the national picture, where 2,240,000 jobs were added during the year — a 1.5 percent growth rate —and government jobs grew by almost 1 percent.

Connecticut Business and Industry Association Economist Pete Gioia noted that Connecticut was the only New England state that didn’t add jobs in 2016.

Massachusetts added 56,000 jobs in 2016, a 1.6 percent gain, Gioia pointed out. He called this news “hugely disappointing.”

Gioia expressed hope that January’s job gains will put Connecticut on track to grow more like the country as a whole.

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During 2015, Connecticut employers added about 8,600 jobs. The best job growth since the 2008 recession came in 2013, when the state economy added 20,000 jobs.

One of the few bright spots was the health care and social assistance category, which has continued to add jobs in good times and bad.

One of those employers is the Wheeler Clinic, which employed 934 people on January 1, up 17 from a year earlier. In both 2015 and 2014, the agency added 22 workers.

Wheeler Clinic provides mental health, addiction treatment and some primary care services, as well as services to children involved with the child welfare system.

President and CEO Susan Walkama said the clinic has hired doctors, nurses, and medical assistants. Hospital partnerships, a new source of funding for the agency, paid for a handful of mental health clinicians who work on contract in Bristol Hospital and Johnson Memorial’s emergency departments.

Wheeler has added a handful of positions in outpatient clinics to deal with steadily rising demand for opiate and alcohol addiction treatment. Wheeler received federal money to deal with the opiate crisis.

The vast majority of the funding Wheeler receives is from Medicaid and state grants, with private donations, patient fees, Medicare, and other government payers relatively small contributors. Because of the state budget crunch, Wheeler had to lay off five employees in 2016, as the state grants that supported their salaries were terminated.

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Even with stagnant job growth, Connecticut’s unemployment rate fell during the year from 5.4 percent to 4.4 percent, a rate the Bureau of Labor Statistics said is indistinguishable from the federal unemployment rate. However, Connecticut traditionally has a lower unemployment rate that the nation as a whole, because its workforce is far more educated. The more education you have, the less likely you are to be out of work.

The unemployment rate can decline when jobs aren’t being added because people are hired to replace people who are retiring. It can also decline if Connecticut residents are hired in New York or are allowed to work from home for employers even further afield. The number of people in the labor force has been growing, so the decline is not a symptom of people giving up looking for work.