Colorado’s labor force declines
Colorado’s unemployment rate continued to bob around the mid 3% range, landing at 3.5% for November, according to the latest job data. That’s down one-tenth of a percentage point from October but up one-tenth from September.
This vibrating rate, however, has little to do with how many people filed for unemployment. It’s more about how many more joined or dropped out of the state’s labor force. Last month, 4,700 people left the workforce, possibly due to retirement, sickness, or just quitting or stopping the job hunt. And, that affected the state’s state’s proudest indicator of a strong workforce — the labor force participation rate, which dropped to 69.2%. This means 69.2% of Colorado’s working age adults were working or looking for work.
The changes aren’t much of an economic concern yet, said Ryan Gedney, principal economist for the Colorado Department of Labor and Employment.
“While the participation rate has dropped from its recent peak of 69.6% in August, it still exceeds the January 2020 pre-pandemic rate of 68.6%,” Gedney said. “The November rate of 69.2% ranked as the second highest nationally, trailing only Nebraska’s.”
Colorado’s job market has continued to show strength despite higher inflation, talk of recession, and the recent spate of layoffs in the tech and real-estate sector. And, numbers that showed weakness — the leisure and hospitality industry lost 2,600 jobs in November — could be explained. The data was collected Nov. 12, before the ski season was in gear, Gedney said.
“While there were some ski areas open by Nov. 12, I’d say the majority were opening the week following,” he said. “We may not pick up the beginning of seasonal employment until December estimates.”
There are still two job openings for every unemployed worker in Colorado, according to Bureau of Labor Statistics data. But, at least one local economist pointed out that this could change next year because of the Federal Reserve’s method of taming inflation. The Fed has hiked up interest rates all year, including raising it half of a percentage point on Wednesday to 4.25% and 4.5%, the highest level in 15 years.
“If a Federal Reserve-induced recession occurs in Colorado, and the unemployment rate reacts as it has in past recessions, then based on the recent increase in the Fed funds rate, the unemployment rate could increase by 5.9 percentage points, and there could be up to 171,000 job losses,” said Steven L. Byers, senior economist at conservative think tank The Common Sense Institute in Greenwood Village, in a new report.
In other words, he added, Colorado unemployment rates could go to 9.4% next year.
Tamara Chuang writes about businesses, technology, and the local economy for The Colorado Sun. She also writes the “What’s Working” column, available as a free newsletter at coloradosun.com/getww.
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Members of the valley’s Jewish community gathered at the Albright Pavilion at Aspen Meadows Thursday for their second annual menorah lighting ceremony to celebrate and acknowledge the first day of Hanukkah.