HARTFORD, September 19 — Connecticut’s labor market contracted for an eighth straight month in August, the state Department of Labor said in its monthly employment report, as job openings climbed again and the distance between available workers and available jobs widened further. The numbers carry a clear economic stake for a state that has been losing workforce faster than the rest of the country.
Connecticut’s labor force — the people working and looking for work — fell by 4,100 last month and now sits at its lowest level in five years. That brings 12-month declines to 54,000, a drop of 2.8%.
As of August, the state’s labor force is 54,500 people below pre-pandemic levels, also down 2.8%. The national average over the same period is up 3.2%.
Payrolls break a five-month streak
Payroll job growth fell by 300 in August, ending a five-month run of gains. The trade, transportation and utilities sector offset losses in professional services, information and manufacturing. Total employment — which includes nonfarm payrolls, independent contractors and the self-employed — fell for an eighth month and is at its lowest non-pandemic level since 2014.
The report shows total employment dropped by 72,400 over the last 12 months, the biggest single-year decline in 50 years, excluding the COVID-19 pandemic. Unemployment fell one-tenth of a point to 5.1%, a full percentage point above the national rate of 4.1%, with 18,000 more people unemployed than in August 2025.
The gap between Connecticut’s unemployment rate and the national rate remains at its widest point since the pandemic. A year ago, Connecticut’s rate was 4.9%, the lowest in the region. It is now the highest among the New England states and tied for highest in the country.
Job openings, meanwhile, increased by 4,552 positions, or 5.6%, to 86,238 last month. The Department of Labor said the openings span all industry sectors and occupations, and highlight the hiring challenges employers face.
Four sectors add jobs as participation slips
Four of the state’s 10 major industry sectors posted gains in August, led by trade, transportation and utilities, which added 1,100 positions (0.4%), bringing 12-month gains to 700 (0.2%). Other services added 400 jobs (0.6%), 2,300 above August 2025 levels (3.6%). Construction added 400 jobs (0.6%), bringing 12-month gains to 2,400 (3.7%).
Connecticut’s labor participation rate fell two-tenths of a point to 62% last month, 25th in the country and down two percentage points since August 2025. The national rate is 61.6%.
Massachusetts has the region’s highest labor participation rate (65.3%), followed by New Hampshire (64.8%), Rhode Island (62.1%), Vermont (62.1%), Connecticut, and Maine (58.6%). On unemployment, Vermont has the region’s lowest rate (2.6%), followed by New Hampshire (2.8%), Maine (3.2%), Rhode Island (3.7%), Massachusetts (4.3%), and Connecticut. Massachusetts has the region’s strongest post-pandemic labor force growth (1.7%), followed by Rhode Island (0.5%), Maine (0.1%), New Hampshire (0%), Connecticut, and Vermont (-3.8%).
Business lobby points to cost of living
CBIA president and CEO Chris DiPentima called the lack of available workers “the most significant obstacle facing Connecticut’s economy.” “This is not a jobs crisis in the traditional sense — this is a people crisis,” DiPentima said. He pointed to the CBIA Foundation’s consumer outlook survey, released the prior week, which showed the state’s high cost of living is the top concern for voters of all political stripes.
DiPentima said candidates for elected office must focus on policy solutions that make it easier for families to stay in Connecticut and easier for businesses to hire, grow, and keep good jobs in the state. What to watch next: whether September’s report breaks the eight-month run of employment declines, and whether the widening gap between 86,238 open positions and a shrinking labor force moves workforce policy to the center of the state’s election debate.
