Colorado employers added enough jobs in December to help push the unemployment rate below 5% for the first time since the pandemic started, according to a monthly update from the Colorado Department of Labor and Employment.
The state’s seasonally adjusted unemployment rate fell from 5.1% in November to 4.8% in December, but it remains significantly higher than the U.S. adjusted rate of 3.9% and the low 2.8% rate seen in February 2020. Colorado’s rate translates into 154,300 people in the state who meet the official definition of unemployed, per a household survey.
Colorado employers added 9,000 nonfarm jobs between November and December on a seasonally adjusted basis while the number of jobs added between October and November was revised higher to 14,100 versus the 9,800 initially reported.
“Right now, the momentum is strong enough to win out over the headwinds but the combination of omicron, inflation, labor shortages and supply-chain disruptions have prevented the state from growing at a faster rate,” said Broomfield economist Gary Horvath. “Most likely, we can add interest rate hikes and a mid-term election to that list.”
The full brunt of the surge in omicron cases hadn’t appeared yet when the employment statistics were gathered in mid-December. The rapid and record-setting wave of infections likely didn’t put the brakes on the recovery, although it might have slowed hiring in leisure and hospitality, which added only 900 jobs month-over-month in December. For the year, that sector added 85,600 jobs, more than half the overall gain of 152,000 jobs in the state in 2021.
Job gains last month were strongest in professional and business service, which rose by 1,900 positions month-over-month. Financial activities rose by 1,200 positions while government employers added a net 1,100 jobs and manufacturing added 1,000. Educational and health services dropped 200 jobs in the month.
For all of 2021, the only sector that ended the year with fewer workers than it started with was construction, which shed 1,000 payroll jobs despite strong demand for both residential and commercial projects.
So far, the state has recovered 89% of the jobs it lost in March and April of 2020 versus an 84% recovery rate nationally, said Ryan Gedney, a senior labor economist with the state during a press call on Friday morning.
The state’s labor force, which includes the employed, the self-employed and those actively looking for work, crossed 3.2 million for the first time in December, Gedney said. That’s a positive sign in that more workers are coming forward to take jobs, which could help ease labor shortages.
Despite having a higher job recovery rate, Colorado’s unemployment rate continues to lag, in part because a much higher share of the population is working or looking for work. But Gedney notes things are improving. A year ago, only seven out of Colorado’s 64 counties had an unemployment rate below the U.S. rate. As of last month, 29 counties were under the U.S. unemployment rate.
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