Jobs rate bucks talk of recession
The Colorado Sun
Colorado’s job growth has been one of the stronger, if conflicting, signs that, if we are in a recession, this is not your typical recession. The state recovered all the jobs lost in the early part of the pandemic by March, ranking as the 12th fastest recovery in the nation.
But after 13 months of declining unemployment rates, the state’s unemployment rate increased a smidge in August and stayed put at 3.4% in September, according to the latest jobs report. That put Colorado right in the middle for unemployment rates nationwide. It was a narrow range, though. Minnesota had the lowest rate of 2% while Illinois was the highest, at 4.5%.
Ryan Gedney, senior economist at the Colorado Department of Labor and Employment, said Friday that he’s not concerned.
“From a labor-market perspective, there’s zero indication of a recession in terms of looking at the payroll jobs or the unemployment rate,” he said. “If we dig even deeper into (unemployment claims), they are historically low.”
The U.S. Bureau of Labor Statistics data actually shows that the number of unemployed Coloradans shrank in September, by about 2,000, from August. What also changed was the number of people in the labor force shrank by 2,800, possibly due to retirement. The changes to both weren’t enough to budge the unemployment rate.
But, any sort of recession naysaying is just from the perspective of job losses, he added.
“That’s not to say there aren’t headwinds,” he said. “Certainly, in Europe and the U.S., in terms of inflation concerns, interest rates, and Federal Reserve actions, there are certainly headwinds; but, if we look at a snapshot right now of the labor market, there are no indicators that we’re in a recession at this point.”
So, why does a flat unemployment rate and declining labor force still seem, if not upbeat, un-recession-like?
It’s because of history, he said.
In the five years before the pandemic, Colorado’s monthly unemployment rate hovered between 2.5% and 4%. We’re in between that now. And, the labor force participation rate in the same five-year period was lower than today, which means fewer working-age adults were working or looking for work.
In September, the number of Coloradans in the labor force declined by 2,800 from August, according to the latest data. This labor force participation rate dropped two-tenths of a percentage point to 69.4% in September. Before the pandemic disruption, the rate was lower, at 68.4% in February 2020, partly because there were fewer people working or looking for work.
“I do expect to see a slowing of the labor force participation rate just because the state’s really reached record levels that it hasn’t seen in a decade,” he said. “There’s just a certain point where we weren’t going to see any increases in the participation rate anymore.”
More September job report bits:
- Average hourly earnings grew to $34.17, up 29 cents from August, and up from $32.12 a year ago. The U.S. average was $32.36.
- All industries in Colorado have recovered the jobs lost at the start of the pandemic, except for the mining industry, which is down even further, by 3,900 jobs. The industry lost 2,400 jobs in March and April 2020.
- All regions of Colorado have recovered jobs lost in the pandemic except for Greeley, which has recovered only 57% of jobs lost. That’s due to Greeley’s high concentration of oil and gas, which hasn’t recovered.
- 45 counties in Colorado had unemployment rates that were equal to or less than the U.S.’s rate of 3.3%. In the major metro areas, Pueblo had the highest at 5.1% while Boulder had the lowest at 2.5%.
Tamara Chuang writes about businesses, technology and the local economy for The Colorado Sun. She also authors the weekly “What’s Working” column, which is available as a free newsletter at coloradosun.com/getww. The Colorado Sun is a journalist-owned, award-winning news outlet based in Denver that strives to cover all of Colorado so that our state — our community — can better understand itself.
While new restaurants enter the Aspen scene, there are several spaces that will remain empty this winter. Meanwhile, the retail market remains extremely hot.