Connecticut Payrolls Hit All-Time High Even as Trump Eliminates Federal Jobs
Connecticut added 5,300 total payroll jobs in January 2026, with private sector employment up 5,000 positions and nine of ten major industry sectors gaining jobs
Federal government employment in Connecticut fell by 1,200 jobs over the year as the Trump regime’s workforce cuts reached the state
Connecticut’s total nonfarm employment surpassed its all-time high for the first time since March 2008, even as the unemployment rate ticked up to 4.5%
Connecticut’s economy added 5,300 payroll jobs in January 2026, with private sector employment driving the gains even as federal government job cuts reduced the state’s federal workforce for the second straight year, according to newly benchmarked data released April 7 by the Department of Labor.
The state’s total nonfarm employment reached 1,722,300 — surpassing the all-time Connecticut record of 1,720,900 set in March 2008, before the financial crisis wiped out nearly two decades of job growth. Private sector employment rose 5,000 positions in January to 1,487,000, up 6,900 jobs from January 2025.
Nine of the state’s ten major industry sectors added jobs in January. Trade, transportation and utilities led in raw numbers with 1,400 new positions, followed by professional and business services with 1,100 and manufacturing with 800. Health care and social assistance, part of the education and health services sector, added 1,400 jobs over the month and 6,600 over the year — the largest year-over-year gain of any subsector in the report. Financial activities was the only sector to lose ground, shedding 200 positions.
The gains came against a backdrop of deliberate federal workforce contraction. Federal government employment in Connecticut stood 1,200 jobs below its January 2025 level, the Department of Labor reported, part of the Trump regime’s broad effort to reduce the federal civilian workforce. State and local government employment partially offset those losses, leaving the overall government supersector up 300 jobs for the month but still down 1,400 positions over the year.
Average hourly earnings for private sector workers reached $40.25 in January — the first time statewide hourly earnings have ever exceeded $40.00, according to the Department of Labor. Average weekly earnings rose to $1,344.35, up $51.21, or 4.0%, from a year earlier. Consumer prices rose 2.4% over the same period, meaning Connecticut workers saw real wage gains in January.
“Benchmark revisions show that job growth and the unemployment rate were just slightly higher in 2025 than previously estimated,” said Patrick Flaherty, Director of the Office of Research at the Connecticut Department of Labor. “The unemployment rate rose modestly, and job growth slowed toward the end of 2025. Payroll jobs numbers show Connecticut got off to a good start in 2026.”
Connecticut’s unemployment rate rose two-tenths of a percentage point to 4.5% in January, and has climbed nine-tenths of a point since January 2025. The state’s jobless rate now sits slightly above the national rate of 4.3%, the first time that has occurred since January 2023.
The next Connecticut Labor Situation release, covering February 2026 data, is scheduled for Tuesday, April 21.
By Kevin Coughlin