Colorado’s unemployment rate rose to 4.4% in December, according to the Colorado Department of Labor and Employment, up from 4.3% the month before.

The state’s unemployment rate is more than a full percentage point from the same time last year. It’s higher than the national average, which fell to 4.1%.

The state added 300 jobs in Colorado in December for a total of 3,010,000 jobs. There were job losses in the private sector, which saw 800 fewer jobs, while the government sector gained 1,100 jobs, according to CDLE.

Colorado’s job growth was 1.8% annually, according to the Leeds School of Business quarterly report released Monday, ranking the state 12th in the nation. The University of Colorado Boulder economists forecast growth will slow to 1.2% in 2025.

The state is seeing many positive signs in its job market, said CU Boulder Economist Brian Lewandoski, from growth in job numbers, wages, income and gross domestic product.

“All of that is pointing to a continued expansion in the economy,” Lewandowski said, albeit slower than it was before.

Still, rising unemployment is a cause for concern.

“We need to be watching this closely to understand if it’s starting to point to some underlying slowing in Colorado’s labor market,” he said.

Colorado saw job openings fall 3% between September and December, a sharper decline than the nationwide average of 0.7%, according to another quarterly report from the Colorado Chamber of Commerce by Aspen Technology Labs.

The median salary grew nearly 3% to $61,745, the chamber report found.

Even though job openings are falling, “Colorado continues to lead in sectors like remote jobs and scientific roles. We remain bullish on the Colorado jobs market for 2025,” said Michael Woodrow, founder of Aspen Tech Labs, in a news release.

Colorado recorded 72,000 jobs fewer than earlier report, revisions show

Federal numbers won’t show Colorado’s data next month

But the full picture of Colorado’s job market is still murky as the state’s data collection has had trouble with getting accurate numbers due to the modernization of its unemployment insurance system, according to CDLE.

The state modernized the employer premiums system in October 2023, where employers are required to report wage and employment numbers that are used for the state.

Since then, the state’s jobs data has been in question. 

The Bureau of Labor Statistics announced last month it would take the unprecedented step of not publishing Colorado’s employment and unemployment figures starting in 2025 due to low faith in the state data’s accuracy.

The federal agency releases job reports every month using sample data collected from every state, which is considered to be fairly accurate. As the year goes on, it collects more data through a process called benchmarking to fine tune its figures and get a more precise understanding of how the nation’s job market is faring.

In the last revision, Colorado’s job market looked grimmer than was originally believed.

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In March 2024’s benchmarking report released in August, Colorado reported 72,000 fewer jobs than the initial data showed, according to the federal agency.

The BLS also reported large revisions of 818,000 jobs, with Colorado accounting for nearly 9% of the difference, a sizable amount for a state that makes up about 1.7% of the total U.S. population.

After the dramatic revisions, the BLS decided against completing 2024’s benchmarking process or publishing monthly estimates for Colorado beginning in March, when January’s data and 2024 revisions are released.

“Instead of doing anything to that number, they’re choosing to do nothing to that number and waiting on better data to be produced,” Lewandowski said.

CDLE said it would also not release employment data used for the BLS in March and future monthly updates could be “impacted” until the bureau lifts the suppression.

“The CDLE remains committed to producing high quality data and is working with the BLS to limit disruptions to all future releases,” CDLE said in a press release.

“The quality of data is something we’ll be scrutinizing pretty heavily,” said Lewandowski, who follows the state’s data for CU Boulder’s quarterly economic indicators report.

And with it, how the issues are affecting the understanding economists have of Colorado’s labor market is still unclear, he added.

“That’s something we need to be really mindful of and just understand if changes that we’re seeing in the employment data are real,” he said, “or if they could be skewed by some data quality issues.”