Colorado unemployment rate below U.S. rate in August

Colorado’s unemployment rate has fallen below the national average for the first time in nearly two years, according to the latest update from the Colorado Department of Labor and Unemployment.

Increased hiring and a decrease in the labor force contributed to the state’s unemployment rate dropping from 4.5% in July to 4.2% in August. In comparison, the national unemployment rate rose from 4.2% to 4.3% during the same period, marking a significant milestone for Colorado.

Despite historically maintaining a lower unemployment rate than the U.S. due to a strong job market and its appeal to employers, Colorado has faced challenges in sustaining this trend since the onset of the pandemic.

In August, the number of unemployed individuals in the state decreased by 9,000, bringing the total to 139,100. Additionally, the state’s labor force saw a decline of 4,700 individuals, totaling 3,275,600.

Colorado’s labor force participation rate stood at 67.4% in August, the lowest since December 2020, as reported by the CDLE.

Despite a sluggish national hiring trend, Colorado added a net 3,000 nonfarm jobs in August, representing nearly 14% of the total jobs gained in the country last month, despite comprising only 1.9% of the U.S. workforce.

While Colorado’s private sector gained 3,300 jobs during the period, the public sector experienced a net loss of 300 jobs. Over the past year, the state added a total of 18,300 jobs, with the private sector contributing 8,800 jobs and the public sector 9,500.

This translates to a 0.6% annual growth rate in payrolled employment in Colorado, below the national rate of 0.9%.

Notable job gains in August were observed in educational and health services (3,000 jobs) and professional and business services (1,700 jobs), while the financial activities sector saw a decline of 2,100 jobs.

Despite Colorado’s recent success, economists are predicting a potential recession within the state in the coming year, along with ongoing budget challenges and service cuts due to reduced federal support.

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