Flaherty: Growing CT’s labor force key to 2024 economic outlook

Connecticut’s overall employment reached pre-pandemic levels in 2023, with the unemployment rate (3.5% at the end of September) as low as it has been in over 30 years (the last time it was lower was in November 2001). The number of job openings remains high by historic standards. As long as the national economy continues to avoid recession (and a recession now seems very unlikely), Connecticut will continue to add jobs. The major constraint on growth is the available labor force. Fortunately, efforts are underway to remove barriers for those who have had difficulty engaging in work. In addition, the latest Census data is encouraging. While the media headlines (correctly) noted Connecticut had a net influx of approximately 57,000 residents in 2022, the numbers are even more encouraging from a labor force perspective. The more than 145,000 people who moved to Connecticut from other states were more likely to be of prime working age than the 88,000 individuals who moved out. In addition, nearly 27,000 people moved to Connecticut from other countries, and more than 70% of these immigrants were between the ages of 20 and 59. In the aftermath of the pandemic, Connecticut has added jobs and seen the unemployment rate fall, while the labor force has not recovered. The 2024 outlook assumes that efforts to grow the labor force — both by engaging Connecticut residents who are currently not working or looking for work, and attracting new residents — will be successful. There is evidence this is already starting to happen. Patrick Flaherty is the director of research and information at the Connecticut Department of Labor Check out the rest of HBJ's 2024 economic forecast issue