LABOR SITUATION Office of Research

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1 Sharon Palmer Commissioner LABOR SITUATION Office of Research FOR IMMEDIATE RELEASE May 2013 Data CT Unemployment Rate = 8.0% US Unemployment Rate = 7.6% Nonfarm jobs rise 1,000 in May but the unemployment rate stays at 8.0% WETHERSFIELD, June 20, 2013 Following a large gain of 6,400 nonfarm jobs in April, Connecticut added another 1,000 nonfarm positions in May, for the best five month start to a year of employment gains since the job recovery began at the start of 2010, according to estimates by the U.S. Bureau of Labor Statistics (BLS) and released by the Connecticut Department of Labor. Connecticut has now gained jobs in four of the first five months of 2013, only losing employment during the blizzard-impacted month of February. The state s unemployment rate remained unchanged at 8.0% in May, but experienced a key turnaround in civilian labor force growth which had been on a continuous decline since June of The unemployment rate has held steady at 8.0% for four consecutive months. Connecticut s unemployment rate is down four-tenths of a percentage point from May 2012 (8.4%). With the exception of a storm impacted February, Connecticut has been experiencing consistent job growth so far this year, said Andy Condon, Director of the Office of Research. The upward turn in labor force participation, after 35 straight months of decline, may indicate increased confidence in labor market conditions. However, there are still headwinds ahead. Federal budget sequester cuts could hinder employment growth possibilities throughout the rest of Nonfarm Jobs (business establishment survey) Preliminary estimates indicate that nonfarm wage and salary employment in Connecticut increased in May, up by 1,000 jobs (0.1%) over April, to a seasonally adjusted 1,650,400 positions. All of the monthly job gain was attributable to hiring in the private sector (2, %), while government entities declined (-1,400, -0.6%). The state has added 12,500 nonfarm jobs (0.8%) since May of last year, with private sector hiring generally stronger, adding 13,200 jobs (0.9%) in that same timeframe. Public sector employment is lower over the year (-700, -0.3%). April 2013 nonfarm job gains were revised higher by 100 to 6,400 (0.4%). The three-month moving average of nonfarm employment (seasonally adjusted), used to address monthly volatility in the job estimates, has been on an improving uptrend since the beginning of the year (see chart on page 7). Four of ten major industry supersectors posted job gains in May, while five exhibited employment declines. The combined construction and mining supersector, which had been higher for the last two months, was unchanged. The breadth of industry supersector employment change narrowed from last month s seven of ten job gaining industry supersectors to just four of ten this month. May brought industry supersector employment gains that were led by the professional and business services supersector (2,300, 1.1%). Gains from administrative and support services (1,800, 2.1%), which boosted this supersector, came from employment services and temporary agencies. The education and health services (1,700, 0.5%) supersector again provided consistent job growth over the month despite an educational services decline (-400, -0.6%) as college and university semesters ended. This supersector leads in industry job growth over the year (6,800, 2.1%). The trade, transportation, and utilities supersector (300, 0.1%) exhibited a small gain last month with transportation, warehousing, and utilities (400, 0.8%) providing the only sub-component increase as retail trade (-100, -0.1%) declined slightly and wholesale trade was unchanged. Other services (200, 0.3%) also came in with just a small gain over the month.

2 2 The five supersectors losing jobs were once again led lower by government (-1,400, -0.6%). Both the federal government (-200, -1.2%) and especially local government (-1,300, -0.9%) were lower as state government (100, 0.2%) managed a small gain. The manufacturing supersector (-1,200, -0.7%) also lost jobs. Durable goods manufacturers (-1,300, -1.0%) were weak and could not be offset by a very small nondurable goods gain (100, 0.3%). The financial activities (-600, -0.5%) supersector continues to shed jobs from finance and insurance (-600, -0.5%) while real estate was unchanged. The leisure and hospitality (-200, -0.1%) supersector, which has been very strong recently with seven monthly gains in a row, was lower this month due to a drop from restaurants and hotels (-1,300, -1.1%), although arts, entertainment, and recreation (1,100, 4.7%) job gains were strong. The information supersector was just barely lower (-100, -0.3%). Connecticut s growth pace in 2013 continued on a positive note in May gaining a net 10,700 jobs in the first five months (2,140 per month) compared to 6,800 (1,360 per month) in 2012 (Jan.-May). In 2011, Connecticut had added 7,800 jobs in the first five months (1,560 per month) and in 2010, when the recovery just started and was Census-boosted, the pace was still slower (5,700, 1,140 per month). This is the best five-month job growth year to date since the employment recovery officially began near the beginning of Recession recovery: Connecticut has now recovered 58,600 positions or 48.3% of the 121,200 seasonally adjusted total nonfarm jobs that were lost in the state in the March 2008 to February 2010 employment downturn. The jobs recovery is now 39 months underway. The private sector has been more upbeat and has recovered 67,500 (59.2%) of the 114,000 private jobs that were lost during the same employment recession. At 1,650,400 in May, nonfarm jobs are currently at an employment recovery highpoint statewide. Labor Market Areas (LMAs): Three of the six major Connecticut Labor Market Areas (LMAs) posted job gains in May 2013, while three of the major state LMAs showed losses. (The major Connecticut LMAs are estimated and seasonally adjusted independently from the statewide numbers.) The New Haven LMA (1,800, 0.7%) and the Bridgeport-Stamford-Norwalk LMA (1,500, 0.4%) provided the most job growth, as the Waterbury LMA (100, 0.2%) exhibited just a small increase. The Norwich-New London LMA (-2,100, -1.7%) had the largest losses and the job decline was considered statistically significant. The Hartford-West Hartford-East Hartford LMA (-800, -0.2%) and the Danbury LMA (-100, -0.2%) were also lower. The typical employment increases influenced by summer hiring for certain industries are happening at different intervals throughout the state this year. This could be reflecting the blizzard-adjusted school schedules. Hours and Earnings: The private sector workweek, not seasonally adjusted, averaged 33.6 hours in May 2013, down just one-tenth of an hour from the May 2012 figure (33.7, -0.3%). Average hourly earnings at $27.85, not seasonally adjusted, were down eleven cents, or -0.4% from the May 2012 hourly pay estimate. The resulting average private sector weekly pay was estimated at $935.76, down $6.49, or -0.7% over the year. Information for the manufacturing production workweek and earnings can be found in the table section of this release under the Hours and Earnings data category. The year-to-year change in the Consumer Price Index for All Urban Consumers (CPI-U, U.S. City Average) in May 2013 was 1.4%. Labor Force Data (residential household survey) Connecticut s unemployment rate was estimated at 8.0% for May This is unchanged from the April 2013 estimate (8.0%), but down four-tenths of a percentage point from the May 2012 unemployment rate of 8.4%. Connecticut s seasonally adjusted civilian labor force was estimated at 1,852,700 for May The month of May brought a key reversal in civilian labor force growth (4,500, 0.2%) which had been in a steady decline. This may be a sign that improved prospects in the labor market this spring are bringing out more job seekers. Unemployment: Based on the household survey, the number of unemployed, seasonally adjusted, increased by 1,900 (1.3%) over the month to 149,000 in May 2013, but the unemployment rate was left unchanged at 8.0%. This is the fourth month in a row that the state s unemployment rate has been stable at 8.0%. It has not been this low since April 2009 when it was 7.9%. The state s number of unemployed has declined by 8,800 (-5.6%) since May The preliminary April United States unemployment rate was 7.6%, up one-tenth of a percentage point from April 2013 (7.5%), and lower by six-tenths of a percentage point from May 2012 (8.2%).

3 3 The May 2013 average weekly initial unemployment claims for first-time Connecticut filers decreased over the month by 317 (-6.5%) to 4,583, and were lower by 353 claims (-7.2%) from last May (4,936). The nonfarm employment estimate, derived from a survey of businesses, is a measure of jobs in the state; the unemployment rate, based on a household survey, is a measure of the work status of people who live in Connecticut. Overall, as the national and state economies recover, volatility in monthly numbers can be expected. Additionally, changes in methodology that culminated in March 2011 with the U.S. Department of Labor, Bureau of Labor Statistics assuming complete responsibility for estimating all states monthly nonfarm job counts, have contributed to the monthto-month variability in the numbers. Jobs estimates are best understood in the context of their movement over several months rather than observed changes in a single month s estimate. Next Connecticut Labor Situation release: July 18, 2013 (June 2013 data). Contact: Communications Office (860) Labor market information is available on the Internet at Folly Brook Boulevard, Wethersfield, CT An Equal Opportunity/Affirmative Action Employer

4 Expected Revisions to Connecticut Nonfarm Job Estimates Fourth Quarter 2012 Upward revision projected for fourth quarter 2012 statewide nonfarm payroll employment estimates On May , the Connecticut Department of Labor, Office of Research, posted preliminary UI employment data (Quarterly Census of Employment and Wages, QCEW) for December 2012, on the Office s Labor Market Information website. This release of preliminary universe counts of employment by industry for Connecticut gives us an early indication of the likely future revisions to the current Bureau of Labor Statistics (BLS) estimates of nonfarm employment that get benchmarked and released every March for the prior year. There is about a six-month delay in comparing between the current employment estimates based on a sample that are published one month later as economic statistics, and the actual universe counts that get compiled and edited from nearly all employers in the state. The annual benchmark just released in March 2013, incorporated a process that replaced the monthly sample-based employment estimates made during the previous year, with actual universe employment counts through September (the 3 rd quarter). This established the actual pattern of monthly employment growth based on complete universe employer worksite reporting up to September From September 2012 on, the benchmark method then calls for a re-estimation with a more complete sample for the final three months of 2012 (4 th Quarter). We now have some insight into the probable BLS revisions to the still sampled fourth quarter months of 2012 that are in place for Connecticut in the current BLS nonfarm estimates. The Office of Research calculated the differences first at the not seasonally adjusted level and then applied that difference to the seasonally adjusted change already in place (the seasonal factors of the current estimates). We are aware that after next year s benchmark, new seasonal factors will be developed that could slightly alter the seasonal outcome, but this is just an approximation of the likely revisions (and direction) to nonfarm employment going forward. We do not want to wait a year to know where the approximate BLS revisions are. The Office of Research QCEW unit reported total covered employment for Connecticut in December 2012 of 1,657,631 (preliminary data). Also available on our website is December 2011 total covered employment of 1,641,049. The QCEW December 2012 comparison to December 2011 shows a difference of 16,582 or 1.0% job growth. The official BLS statewide nonfarm job estimate for Connecticut, not seasonally adjusted, from December 2012 (1,658,704) to December 2011 (1,652,826) reveal a difference of only 5,878 or 0.4% year-to-year job growth. A difference of 10,704 exists between the 16,582 found in the QCEW change and the 5,878 on the official BLS statistics (unadjusted December 2011 to December 2012). To make total covered employment, which makes up 96-98% of all jobs in the state, comparable to official BLS nonfarm statistics, we need to subtract out agricultural and domestic household employment and account for other presumed non-covered employment such as student laborers, religious organizations, and railroads. After these adjustments, we find a difference of 15,764. Now we must subtract from that the change already calculated by BLS at the time of the December 2012 estimates (5,878 unadjusted). [15,764-5,878 equals 9,886 (upward revision).] We then applied this difference to the actual December 2011 to December 2012 change already calculated (seasonally adjusted) to get the approximate actual over-the-year job growth and level for December Applying that difference (9,886, we will round down to 9,800) to the December 2012 seasonally adjusted level of 1,639,700, gives us a new December 2012 level of 1,649,500, seasonally adjusted. We did the same preliminary rough calculation for the other interim fourth quarter months as well (November-October, see chart next page). These are the likely upward revisions (+-1,500 due to editing and rounding) to recent past history, specifically the fourth quarter months of 2012, a quarter heavily impacted by Hurricane Sandy and year-end tax changes. In other words, if this trend continues, it could be indicative that current estimated nonfarm employment levels in 2013 may be underestimated as well.

5 Connecticut Nonfarm Employment (SA, Jan December 2012) Sep-12 Oct-12 Nov-12 Dec-12 BLS Estimates Likely Revisions May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Apr-11 Feb-11 Mar-11 Jan-11 Employment (000's)

6 NONFARM EMPLOYMENT Jobs - by Place of Work CONNECTICUT AND THE UNITED STATES - Seasonally Adjusted May April March February May Over Month Over Year 2013 P 2013 R Change Rate Change Rate CONNECTICUT 1,650,400 1,649,400 1,643,000 1,640,400 1,637,900 1, % 12, % Total Private 1,413,900 1,411,500 1,405,600 1,402,500 1,400,700 2, % 13, % Goods Producing Industries Mining % % Construction 55,700 55,700 53,500 50,700 51, % 4, % Manufacturing 161, , , , ,600-1, % -3, % Durable Goods 125, , , , ,600-1, % -3, % Nondurable Goods 36,800 36,700 36,200 35,900 37, % % Service Providing Industries Trade, Transportation & Utilities 296, , , , , % % Wholesale 62,300 62,300 61,700 62,300 63, % -1, % Retail 183, , , , , % 1, % Transp, Warehousing & Utilities 50,300 49,900 49,900 48,800 50, % % Information 30,900 31,000 30,800 30,600 31, % % Financial Activities 130, , , , , % -2, % Finance & Insurance 111, , , , , % -2, % Real Estate, Rental & Leasing 18,900 18,900 18,800 18,800 18, % % Professional & Business Services 205, , , , ,300 2, % 1, % Prof, Scientific & Tech Services 86,500 85,900 87,900 86,300 89, % -3, % Management of Companies 30,500 30,600 30,500 30,500 29, % % Admn & Support & Waste Mgt Serv 88,200 86,400 84,700 86,700 83,700 1, % 4, % Educational & Health Services 324, , , , ,200 1, % 6, % Educational Services 63,800 64,200 63,500 62,300 61, % 2, % Health Care & Social Assistance 260, , , , ,500 2, % 4, % Leisure and Hospitality 147, , , , , % 5, % Arts, Entertainment & Recreation 24,600 23,500 23,800 23,300 24,500 1, % % Accommodation & Food Services 123, , , , ,500-1, % 5, % Other Services 61,500 61,300 61,700 62,100 61, % % Government** 236, , , , ,200-1, % % UNITED STATES 135,637, ,462, ,313, ,171, ,522, , % 2,115, % LABOR MARKET AREAS (LMA) Labor Market Area employment estimates are made independently of Statewide estimates. May April March February May Over Month Over Year Seasonally Adjusted data 2013 P 2013 R Change Rate Change Rate Bridgeport-Stamford 409, , , , ,200 1, % 4, % Danbury 68,400 68,500 68,900 68,800 67, % 1, % Hartford 546, , , , , % 6, % New Haven 272, , , , ,900 1, % % Norwich-New London 125, , , , ,100-2, % -3, % Waterbury 62,600 62,500 62,900 62,600 62, % % Not Seasonally Adjusted data (Non-Classified Areas, State estimated not BLS) Enfield 45,300 46,200 44,800 44,300 45, % % Torrington 36,500 35,700 35,100 34,800 35, % % Willimantic-Danielson 37,300 36,700 36,400 36,200 36, % % * Less than 0.05% ** Includes Native American tribal government employment P = Preliminary R = Revised Starting with March, 2011, our monthly statewide and major LMA nonfarm job estimates have been taken over by the US Department of Labor Bureau of Labor Statistics. This is the final phase of transition in this program, which began in As a result of changes in the estimation procedures, you are likely to see more variability in month-to-month estimates of job counts. Caution should be used in interpreting any single month s estimate. The data are best interpreted to identify trends and cycles over several months and quarters. If you have any questions about these changes, please us at: dol.lmi@ct.gov. Connecticut Labor Situation May 2013

7 UNEMPLOYMENT Persons Unemployed - by Place of Residence CONNECTICUT AND THE UNITED STATES - Seasonally Adjusted May 2013 P May 2012 Change April 2013 R Number Rate Number Rate Number Points Number Rate CONNECTICUT Unemployed 149, , , , Labor Force 1,852,300 1,883,000-30,700 1,847,800 UNITED STATES Unemployed 11,760, ,695, , ,659, Labor Force 155,658, ,998, , ,238, U.S. AND CONNECTICUT UNEMPLOYMENT RATES - Seasonally Adjusted Percent Unemployed US CT 6.0 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D LABOR MARKET AREAS - Not Seasonally Adjusted May 2013 P May 2012 Change April 2013 R Number Rate Number Rate Number Points Number Rate Release of May 2013 sub-state labor force data is restricted by the U.S. Bureau of Labor Statistics until Friday, June 21, An updated Connecticut Labor Situation with these data will be available on our website at that time at: CONNECTICUT 150, , , , UNITED STATES 11,302, ,271, , ,014, P = Preliminary R = Revised Labor force data included in this publication are developed in cooperation with the U.S. Department of Labor, Bureau of Labor Statistics. Connecticut Labor Situation May 2013

8 UNEMPLOYMENT RATES Not Seasonally Adjusted LABOR MARKET AREAS Release of May 2013 sub-state labor force data is restricted by the U.S. Bureau of Labor Statistics until Friday, June 21, An updated Connecticut Labor Situation with these data will be available on our website at that time at: Not HOURS AND EARNINGS CONNECTICUT Statewide - Not Seasonally Adjusted Average Weekly Earnings Average Weekly Hours Average Hourly Earnings May May Change Apr. May May Change Apr. May May Change Apr P 2012 over Yr R 2013 P 2012 over Yr R 2013 P 2012 over Yr R Private Industry All Employees $ $ $6.49 $ $27.85 $ $0.11 $28.08 Manufacturing Production Workers $ $ $98.82 $ $21.81 $ $2.44 $22.14 P = Preliminary R = Revised Hours and earnings are also developed for the state's major industry sectors and Labor Market Areas. They can be found on our website at: Connecticut Labor Situation May 2013

9 T R E N D S Seasonally Adjusted Nonfarm Total Unemployment Employment (000s) Rate 2012 Jan 1, Feb 1, Mar 1, Apr 1, May 1, Jun 1, July 1, Aug 1, Sep 1, Oct 1, Nov 1, Dec 1, Thousands 1, , , , , , , ,620.0 Nonfarm Employment SA 3-Months MA Jan Mar May July Sep Nov Jan Mar May July Sep Nov Jan 1, Feb 1, Mar 1, Apr 1,649.4 R 8.0 R May 1,650.4 P 8.0 P Jun July Aug Sep Oct Nov Dec Avg Weekly Avg Manufacturing Initial Claims Weekly Hours* 2012 Jan 5, Feb 4, Mar 4, Apr 4, May 4, Jun 5, July 4, Aug 4, Sep 4, Oct 4, Nov 7, Dec 5, Jan 5, Feb 4, Mar 4, Apr 4, R May 4, P Jun July Aug Sep Oct Nov Dec Percent Total Unemployment Rate Jan Mar May July Sep Nov Jan Mar May July Sep Nov Average Weekly Initial Claims 8,000 6,000 4,000 2,000 0 Jan Mar May July Sep Nov Jan Mar May July Sep Nov Average Manufacturing Weekly Hours Jan Mar May July Sep Nov Jan Mar May July Sep Nov * Not seasonally adjusted P = Preliminary R = Revised ** Labor-management dispute Connecticut Labor Situation May 2013