CT loses 300 jobs in August; unemployment rate falls to 5.1%

Connecticut’s five-month stretch of job gains ended in August with a loss of 300 payroll positions, although private-sector employment reached a record high, according to the state Department of Labor. Declining government employment accounted for the overall loss. Meanwhile, the state’s unemployment rate fell to 5.1%, down from 5.2% in July, the DOL said. The department also increased its estimate of July hiring, reporting a gain of 3,100 jobs compared with the 2,800 initially announced. Connecticut’s job growth rate of 0.8% so far in 2026 exceeded the national rate of 0.4%, according to the department. Total payroll employment remained above 1.73 million. Healthcare and construction added jobs in August, with construction employment reaching its highest level in 18 years. Manufacturers reduced staffing during the month, but the sector still employed more people than it did a year earlier. Private education employment also declined. Labor officials said the timing of the employment survey and the late Labor Day holiday may have affected those figures. Despite the lower unemployment rate, the state’s labor force — which includes people working or actively seeking jobs — contracted by 4,100 in August. The department cited retirements among Connecticut’s aging population and noted that federal immigration policy changes have been widely reported to affect workforce participation. Officials said the increase in Connecticut’s unemployment rate over the past year has largely reflected people entering the job market, rather than layoffs. Unemployment claims remained roughly in line with year-earlier levels. Labor Commissioner Danté Bartolomeo said employers’ cautious approach to hiring has prolonged some job searches and made experienced workers more reluctant to leave their current positions. Patrick Flaherty, the department’s research director, said August’s results may signal a return to a pattern seen since the pandemic, with stronger hiring early in the year giving way to slower growth later. He expects modest job gains for Connecticut in 2026, provided the national economy does not weaken.