Nov. 20--The state unemployment rate jumped to 8.8 percent in October, even as Connecticut added 1,000 jobs, according to a new report.

The spike in jobs, however, could be due in part to new estimation procedures, a state official said, while an economist said the jump in the unemployment rate actually may be an indication the recovery is beginning.

The state Department of Labor said Thursday the state's nonfarm employment in October was 1,624,000, an increase of 1,000 jobs from the revised September figure of 1,623,000. The gain in jobs came after the state shed a revised 6,200 jobs in September. It was the first time since May the state has added jobs.

Even with the job growth, however, the unemployment rate in October jumped to 8.8 percent from 8.4 percent. The rate is the highest for the state since September 1976, when it was 9.0 percent.

The national unemployment rate in October was 10.2 percent.

"Despite the increase in the state's unemployment rate, there are some positive signs in Connecticut's economic indicators," said Salvatore DiPillo, the state's labor statistics supervisor. "While a gain of 1,000 jobs is welcome news, even more significant is the fact that initial (unemployment) claims for October, at 5,900, decreased by nearly 1,000 from the previous month and are now at their lowest level since last December."

The report notes that job gains and losses were divided among the state's 10 major industry sectors. The largest gains were 1,700 jobs in the leisure and hospitality sector, 1,100 jobs in the professional and business services sector, and 600 jobs in construction, the third straight monthly increase. The biggest losses were 1,300 jobs in the trade, transportation and utilities sector, and 800 in manufacturing.

The report cautions, though, that the state is slowly implementing a change in its methods for estimating nonfarm employment, in cooperation with the U.S. Bureau of Labor Statistics. The new estimates rely almost strictly on the data and no longer allow analysts opinions to alter the numbers.

"We are trying to bring estimates more in adherence with how they make estimates nationally," DiPillo said. "But you are going to see a little more volatility in month-to-month estimates."

Meanwhile, Pete Gioia, vice president and economist with the Connecticut Business and Industry Association, said the spike in the unemployment rate is not necessarily a bad sign. He said it's an indication more people are entering the labor force, which is made up both of those employed and those seeking work.

"What we're seeing here is some signs of recovery, because we're seeing added jobs and at the same time we're seeing more people entering the labor force, which means they're looking for jobs," he said. "And that's what you see at the beginning of a recovery."

Gioia also said the three consecutive months of growth in construction jobs is most likely related to the federal stimulus package.

Things weren't so rosy, however, for the Waterbury labor market area, which saw its non-seasonally adjusted unemployment rate increase in October to 11.2 percent from 11.0 percent in September. The seven-town market once again had the state's highest unemployment rate for the 106th time in the past 107 months, and it was the 10th straight month it was the only state labor market with double-digit unemployment.

The rate for the Torrington labor market area also increased, to 8.2 percent in October from 7.9 percent in September.

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