Colorado’s unemployment rate fell in February to its lowest level in two years as payrolls surged to a record high, the Colorado Department of Labor and Employment reported Friday.

Colorado recovers jobs lost in first months of pandemic

The 4% jobless rate, down from 4.2% in January, is the lowest since February 2020, just before the COVID-19 pandemic triggered hundreds of thousands of job losses from stay-at-home orders and other restrictions on businesses.

Colorado’s unemployment rate has declined in seven of the past eight months – the rate was unchanged from December to January – and was 6.2% in February 2020.

Colorado’s job recovery lags behind neighboring states

Unemployment rates increased slightly in Colorado Springs to 4.2%; edged higher in Boulder, Fort Collins and Greeley; remained unchanged at 4% in the Denver area; and inched downward in Grand Junction and Pueblo. The statewide rate is adjusted for seasonal changes, while the metro-area rates do not include seasonal adjustments.

Colorado unemployment rate falls below 5% in December, a first since the start of the pandemic

Statwide payrolls grew by 14,000 jobs last month to a record 2.83 million, eclipsing the mark set in January 2020 by 6,600 jobs, according to a survey of businesses. The unemployment rate comes from a separate survey of households.

Much of the payroll growth came from the retail, transportation and professional and technical services sectors, with no sector posting a significant decline.

Colorado businesses worried about looming unemployment insurance hike

Without the pandemic, state payrolls probably would include another 100,000 people, based on how quickly the state was adding jobs before COVID-19 hit, said Ryan Gedney, the labor department’s senior economist.

While the state’s job market has recovered faster than most states, he expected job growth rates will not return to pre-pandemic levels until late this year or early in 2023.

Colorado unemployment rate falls for fifth consecutive month

Grand Junction has recovered most quickly of any of the state’s metro areas and now employs 24% more people than before the pandemic.

Colorado Springs ranked second, with 19% more people holding jobs than before COVID-19. Denver, Pueblo and Fort Collins also employ a small percentage more, while Boulder is close to a full recovery at 94% and Greeley trails all other  metro areas at 47%.

First-time claims for unemployment benefits also have dropped dramatically in Colorado and nationwide. The 1,271 new claims filed in the week ending March 12 were well below levels before the pandemic.

Fewer Colorado residents have lost jobs in recent weeks, Gedney said, because employers are doing everything they can to retain workers amid a nationwide labor shortage.