Connecticut’s unemployment rate rose in December and employers trimmed payrolls to close out 2025, according to the state Department of Labor.
The jobless rate increased two-tenths of a percentage point to 4.2%, while nonfarm employment declined by an estimated 500 jobs to 1,713,900, based on preliminary, seasonally adjusted data. In November, the state had added 2,100 jobs.
Over the year, Connecticut employers lost 2,200 jobs (-0.1%), and the unemployment rate is up a full percentage point from 3.2% in December 2024. The state’s jobless rate remains below the U.S. rate of 4.4%.
“There was considerable volatility in 2025 with national issues playing a role in dampening Connecticut’s job growth,” Labor Commissioner Danté Bartolomeo said. “Over the past year, Connecticut’s workforce declined; that makes it harder for employers to hire and it reduces retail and services spending.”
The state labor force totaled 1,935,700 people in December but has shrunk by about 20,000 workers over the past six months. Employers have roughly 70,000 open jobs statewide.
Despite the softer hiring picture, other recent economic data point to stronger momentum in overall output. Connecticut ranked fourth nationally in third-quarter GDP growth, with real output expanding at a 5.6% annual rate, following 4.6% growth in the second quarter, according to the U.S. Bureau of Economic Analysis.
Those gains were driven largely by durable-goods manufacturing, finance and insurance, information, and professional and scientific services — industries that generate high economic output but do not always translate into rapid job growth.
Patrick Flaherty, the labor department’s director of research, said job growth weakened in the second half of the year.
“Connecticut’s economy has shown resilience through some ups and downs this year,” Flaherty said. “… Looking ahead to 2026, we expect a modest growth year in Connecticut — as long as the U.S. economy avoids an economic downturn.”
Private-sector employment fell by 1,000 jobs (-0.1%) in December to 1,476,400, down 5,400 jobs (-0.4%) from a year earlier. Government employment increased by 500 jobs (0.2%) to 237,500, up 3,200 positions (1.4%) over the year.
Among major industry sectors, professional and business services led December gains with 700 jobs added, followed by other services (+400) and education and health services (+200). Government employment also increased.
The information sector was unchanged.
Declines were led by financial activities (-700), manufacturing (-500), leisure and hospitality (-400), trade, transportation and utilities (-400), and construction and mining (-300).
Average weekly earnings rose 3% over the year, roughly keeping pace with inflation, while Connecticut’s labor force participation rate held at 64%, above the national rate.
