Colorado’s unemployment rate surged in March to 4.5%, the highest in nearly five years, as the coronavirus pandemic spread across the state. The rate is likely to move even higher in coming months.

The jobless rate in the Colorado Springs area jumped to 5.5% in March from 3.4% in February. Unlike the statewide rate, the local rates for February and March are not adjusted for seasonal changes. That’s the highest level since February 2015, with nearly 5,000 additional area residents unemployed last month.

The area’s unemployment rate likely will surge in April as more than 12,000 area residents filed initial claims for unemployment insurance benefits during the final two weeks of March. The number of claims filed in the week of March 19 surged more than 11 times during the same week in February to a record 3,586, more than four times the record set in March 2009.

Colorado’s first-time unemployment claims soar past 100,000

The state’s jobless rate in February was 2.5%, tied for the lowest level in records that began in 1976, and was 3% in March 2019. The 2 percentage point year-over-year increase is the highest in records that started in 1976 and puts Colorado’s rate above the national rate – 4.4% in March – for the first time in nearly 15 years. The number of Coloradans out of work in March increased by 62,314, or 77.6%.

“I wouldn’t be surprised to see a double-digit unemployment rate in April, given the number of initial claims” filed in the past four weeks, Ryan Gedney, senior economist for the Colorado Department of Labor and Employment, said Friday on a conference call. More than 230,000 people across Colorado filed for first-time claims for unemployment insurance benefits in the four weeks ending April 11. The claims numbers don’t include self-employed persons, independent contractors or gig workers, but those people are included in the unemployment rate.

First-time unemployment claims triple in the Pikes Peak region

The March unemployment rate, reported by the U.S. Bureau of Labor Statistics, came from a household survey conducted during the week of March 12, before Gov. Jared Polis ordered bars, restaurants, casinos, gyms, barbers and many other businesses to close March 17 and ordered state residents to stay at home except for essential trips 10 days later.

A separate survey of businesses showed the number of people holding private-sector jobs in Colorado fell by 6,000 from the previous month to 2.81 million in March. The private-sector decline from February is the most in statistics that started in 1976. The biggest reductions came in educational and health services, leisure and hospitality, manufacturing, retail and other services. The February total also was revised from an increase of 3,100 to a decline of 400; Colorado hasn’t reported consecutive months of employment declines since early 2010.

More states paying $600 extra in unemployment aid

Colorado has paid out $109 million in unemployment insurance benefits since the pandemic hit the state, which has reduced the fund that pays those benefits to $950 million. The state expects to receive up to $300 million in unemployment insurance payments from employers by June 30, but Gedney estimates the state will pay at least $50 million a week in benefits for months, which could exhaust the fund. At that point, the state likely would borrow from the federal government to continue benefits, he said.

The federal government will pay all new or expanded benefits included in the $2.2 trillion coronavirus relief package. That includes making self-employed persons, independent contractors and gig workers eligible for unemployment benefits, adding $600 a week to benefits for through late July and extending benefit payments another 13 weeks.

The Colorado Department of Labor and Employment announced Friday it will launch a new website Monday for self-employed persons, independent contractors and gig workers newly eligible for unemployment insurance benefits.

The site will be linked to the department’s web portal for those seeking unemployment benefits, coloradoui.gov, and will be separate from the site used by those who were already eligible for benefits. The newly eligible categories, which also include those who can’t work because their children are no longer in school or those who have exhausted their unemployment benefits, were added under the $2.2 trillion coronavirus relief package enacted last month.

“We are working as quickly as we can to get these benefits into the hands of people who are in need during these unpredictable and unprecedented times,” Joe Barela, the department’s executive director, said Friday in a news release. “Colorado’s Unemployment Insurance program – like all UI (unemployment insurance) programs across the country – has been under unprecedented strain for the last month.”

The department will host virtual town halls at 9:15 a.m. Monday in English and 11:30 a.m. in Spanish, also at coloradoui.gov, for those with questions on the new benefits, which also include an additional $600 a week in payments through late July and a 13-week extension of benefits. A registration form is available on the site.

The department also announced it has hired Florida-based call center operator Conversion Calls to operate an 80-person center to take calls from the workers newly eligible for unemployment benefits as well as overflow call volume from the department’s own call center, which has been overwhelmed by calls in the past month.

Wayne Heilman, The Gazette