Employment data released Friday by the Colorado Department of Labor and Employment (CDLE) showed Colorado’s unemployment rate rose one-tenth of a percentage point to 3.4% in December compared to the month prior.
Overall, Colorado’s unemployment rate rose 0.6% from December 2022 to December 2023.
But Colorado economists caution not to be too concerned with the most recent unemployment numbers as future revisions are likely to paint a rosier picture for the state.
“I don't think people should read too much into small ticks up or down. In these numbers, they are based on surveys. So you're not capturing every detail of what happened,” said Bill Craighead, Director of the UCCS Economic Forum.
December’s 3.4% unemployment rate still falls below the national level of 3.7%, which held steady from November. Overall, Colorado only added 300 jobs last month, but economists stress again that upward revisions are likely to come.
“Compared to a year ago, we have more people working in Colorado Springs, but you also have more people looking for work. So that's part of what drives the unemployment rate–is to be counted as unemployed–you have to be looking,” said Craighead. “And if there are more people looking, that's actually not a bad sign. Because that means people only look for jobs that they think they can find a job.”
Craighead called the 3.4% “still extremely low” by historical standards.
The employment situation for December 2023 is based on the household and business establishment surveys. The establishment survey covers about seven times the number of households surveyed, which makes it a more reliable indicator of economic conditions, the CDLE said.
The household survey is meant to capture the employment and labor force status of individuals, including self-employed, independent contractors, farm workers, and those not attached to traditional payroll employers.
The establishment survey comes from businesses and government agencies, meant to measure the number of jobs, but not the number of people employed.
But the surveys have also become more “volatile” in recent years, with fewer respondents answering, said Ryan Gedney, senior economist with the Colorado Department of Labor and Employment.
“Because they're surveys, they're sample-based, and response rates have just simply plummeted since 2020,” said Gedney.
Due to the perceived volatility, the CDLE puts out revisions once employers release their quarterly reports for their unemployment insurance numbers, which provide a more level set of data. The state has been publishing these revisions since 2013 as the country was emerging from the Great Recession.
“The CDLE thought it was important for any stakeholder who wants to understand and look at this information,” said Gedney. “And certainly at a time when we're seeing a lot of volatility estimates, that product is certainly key.”
In terms of job sector growth and losses, though this data is likely to be revised as well, government jobs saw the largest year-over-year growth. In Colorado, the Government sector added an estimated 23,000 jobs from December 2022 to December 2023, with 2,000 being added last month.
This sector includes local governments with positions in education and school districts as the likely driving factors.
Following the Government sector are Professional and Technical Services and Accommodation and Food Services.
But sectors affected by higher interest rates saw more job losses, with Finance and Insurance leading the way with 7,400 jobs lost last year. That was followed by industries like transportation, warehousing, and administrative and support roles.
“I think manufacturing could be impacted by that [high-interest rate environment], financial activities, construction as well,” said Gedney. “You can see that nationally, really start to slow. Is it slowing as much as we're reporting? I'm dubious. But again, I think we'll have a clearer picture in two months.”
The updated employment situation revisions will be released on March 11 along with jobs data for January.
