Connecticut's Payroll Growth Masks Decline in Resident Employment

Connecticut's labor market is sending conflicting signals. Nonfarm payrolls increased by 9,300 jobs (0.5%) in the 12 months through June 2026, slightly faster than the national pace.

However, the total number of employed Connecticut residents fell by 69,500, or 3.7%, with unemployment increasing by 22,700 and the labor force shrinking by 46,800. The unemployment rate climbed to 5.2%, the largest one-year increase of any state.

The difference between these measures can be attributed to various factors, including multiple jobholding, self-employment, and commuting across state lines.

Multiple jobholders appear twice in payroll figures but only once in resident employment, which could contribute to an increase in payroll employment even as the number of employed residents declines.

However, national data suggest that multiple jobholding is not occurring on a sufficient scale, with the share of employed people holding multiple jobs remaining at 5.3% since 2023.

A decline in self-employment could also contribute to the divergence, but even if Connecticut experienced a similar decline, it would fall short of explaining the drop in total employment.