Colorado’s unemployment rate dipped below 6% in August, its lowest level since the pandemic started in March of last year, despite a significant slowdown in hiring, according to a monthly update from the Colorado Department of Labor and Employment.
The state’s seasonally adjusted unemployment rate fell to 5.9% in August from 6.1% in July, according to a survey of households. Colorado tied for the 35th lowest unemployment rate with Texas and Maryland and its rate remains above the U.S. rate of 5.2%.
The state’s labor force decreased by 2,300 in August, but the number of employed individuals rose by 4,700. Of the population over 16, 64.2% are working or actively looking for work, the seventh highest rate in the country.
Colorado employers added 5,600 nonfarm jobs between July and August, which was about 45% of the 12,200 nonfarm jobs added between June and July. Initial estimates had pegged July’s monthly job gains at 14,400, but downward revisions, especially in retail, lowered the count.
“At this point, it is not known what is causing the slowdown,” said Ryan Gedney, a senior labor economist with the department.
COVID-19 cases nationally quadrupled between the week when the July employment numbers were tallied and the week in mid-August when the current count took place. But supply issues are still weighing on some sectors and employers in many industries face labor shortages, which may be resulting in positions staying unfilled.
Broomfield economist Gary Horvath said he has noticed a slowdown in people dining out, with tables easier to land than earlier this summer. In the first seven months of the year, Colorado employers were adding an average of 14,700 jobs a month, so the addition of only 5,600 jobs in August is significant. But the pace remains above the gains of 5,000 jobs a month averaged before the pandemic, he said.
“It is a function of the increase in COVID-19 cases. The number of hospitalizations and cases is similar to early January,” he said.
Of the jobs added in August, 5,000 were in the private sector, while the public sector added 600. Colorado has regained 293,400 of the 375,800 jobs lost between February and April of last year, a recovery rate of 78.1% that remains ahead of the U.S. recovery rate of 76.2%.
The sectors with the biggest monthly gains were leisure and hospitality, up 3,700; other services, up 1,900; professional and business services, up 1,500; trade, transportation, and utilities, up 1,100. Education and health services loss 1,600 jobs and financial activities lost 1,200.
Gedney noted that leisure and hospitality employment was flat nationally last month, so Colorado bucked the trend, with especially strong hiring in food service.
Over the past year, the state had added 117,400 jobs, led by a gain of 47,100 in leisure and hospitality and 24,500 in professional and business services. Over the past year, construction has shed 2,200 jobs and manufacturing has dropped 600 payroll jobs. The state’s annual rate of job growth is at 4.5%, slightly above the U.S. rate of 4.3%.
Next month’s report should provide some early but not definitive insights into whether unemployed workers who lost federal unemployment benefits on Sept. 4 found jobs, remained unemployed or dropped out of the labor force. It should also highlight how the delta variant is impacting hiring and business operations.