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Even With New Jobs, CT Unemployment Rates Rise
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Economists say a rising unemployment rate may be a feature of the recovery for some months to come, even as Connecticut begins to add jobs. And they’re warning that it will take years for the state to recover its pre-recession employment levels.  WNPR’s Harriet Jones reports.

The state Department of Labor says in January, Connecticut added 2,300 new jobs to its total employment. That’s cause for optimism that the recovery may have legs, but at the same time, the state’s unemployment rate rose – to 9%, the highest level it’s seen since the 1970s.  Peter Gioia, chief economist with the CBIA says this is a fairly common phenomenon at the start of a recovery.

"The unemployment rate looks at people who are looking for work, and many times what’s happened before there’s job activity, is people have become discouraged from looking for work and so those people are actually not counted in the unemployment figures even though they may not have jobs. As activity picks up more people are encouraged to look for work you’re going to see an increase in the unemployment rate. That’s not necessarily a bad thing – the important thing is that jobs get added."

Connecticut has lost by most estimates somewhere around 100,000 jobs in this recession. A recent model produced by UConn’s economics department predicts that Connecticut will add back just about a quarter of those lost jobs by the end of 2011. Report author Daniel Kennedy is a senior economist with the state Department of Labor. He says looking at Connecticut’s track record in recent recessions is not reassuring.

"The average number of months it took us to recover lost jobs was 66.5, and we’ve been in an expansion on average over those last two expansions for only 7 months, and then we went back into recession."

That’s confirmed by the New England Economic Project, which is predicting it will take until the end of 2013 to recover 80,000 jobs – not even back to pre-recession levels. But Peter Gioia says it’s getting easier now to see the way ahead, and characterize our economic condition.

"Obviously we’ve got a period of recovery that’s going to be years, but on the other hand we do not have a jobless recovery – it’s just going to be slow growth recovery."

What is certain is that each new month of jobs data will continue to be closely scrutinized .

For WNPR, I'm Harriet Jones.