Colorado only adds 800 jobs in July, but unemployment stays low

Colorado added a paltry 800 jobs between June and July, and job gains could have gone negative absent strong government hiring, mostly from schools working to get back toward pre-pandemic staffing levels, according to a monthly update from the Colorado Department of Labor and Employment.

June job counts, initially estimated at 4,700, were revised lower by 2,900, bringing the total for the month to 1,800. Over the past year, the state has added 38,800 jobs on a seasonally-adjusted basis, equating to a 1.35% rate of job growth, one of the slowest in the country.

“Given the slowdown in the U.S. labor market, it stands to reason that Colorado job growth would drop off accordingly; however, the magnitude of the decline in Colorado is surprising,” said Broomfield economist Gary Horvath. “It is frustrating to see how the Colorado labor market continues to underperform the United States.”

The state’s unemployment rate ticked up from 2.8% in June to 2.9% in July, but it remains below the U.S. rate of 3.5%.

July marks the 15th consecutive month in Colorado with an unemployment rate below 3%, said Ryan Gedney, principal economist with the CDLE, during a news call on Friday morning. Only two other streaks have lasted longer — the early 1990s and between late 2016 and 2018.

Both runs lasted 17 months, Gedney said. If Colorado can stay below 3% in August and September, it will match the prior record runs and break them by October.

Over the past year, the public sector has added a net 20,600 jobs, while leisure and hospitality added 18,000. Professional and business services hiring has held up, adding 8,900 jobs, while natural resource firms are up 1,400 following a run-up in petroleum prices.

Higher interest rates are weighing on financial firms, which have shed 7,100 jobs, and on construction, which is down by 3,000 jobs. Trade, transportation and utilities, which includes retail, is off by 5,400 jobs over the past year. Information, which includes publishing and software jobs, is down by 2,000.

Colorado’s private sector lost 1,900 jobs in June after losing 400 in June, marking the first back-to-back job losses in a year, wrote Cole Anderson, a research analyst at the Common Sense Institute, in an email.

Subtract out leisure and hospitality, and the rest of the private sector has added only 200 jobs in the past year on a seasonally-adjusted basis. And even the hospitality sector isn’t bulletproof. It shed 3,500 jobs between June and July, yet even with that drop sports a 5.3% annual growth rate, the best of any sector.

Some of the weaker job numbers reflect outright job cuts, such as at mortgage firms. And a lack of available workers appears to be at play. The state’s labor force participation rate for workers aged 25 to 54, considered the prime age range, is now at 87%, the highest since 1999 when the dot-com boom was in full swing, Gedney said.

Colorado’s labor force is also the tightest on record, with 2.7 unfilled job openings for every unemployed person, according to a report last month from the CSI. The shortfall is so severe it could cost the state $46 billion in foregone economic activity this year, the group estimates.

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