Colorado’s unemployment rate has reached its lowest point since the current tracking method began in 1976.
There were 1,400 nonfarm payroll jobs added in the state from November to December, with a monthly unemployment rate of 2.5%. That is a full percentage point lower than the national rate of 3.5%.
“This decline is due to gains in total employment outpacing the labor force,” said senior economist Ryan Gedney. “Individuals are getting absorbed into employment very quickly, so they are experiencing short or no unemployment spells.” He added that retirements are also contributing to the decrease.
The December figure is substantially lower from the beginning of 2019, when unemployment stood at 3.7%. Only North Dakota, with 2.4% unemployment, and South Carolina, Vermont and Utah — each with 2.3% — had smaller rates than Colorado.
Gedney said that other states also reached historically low rates of unemployment in December, and that Colorado’s number of nonfarm payroll jobs could be revised upward. For November’s figures, the Colorado Department of Labor and Employment noted a revised increase, especially in the number of leisure and hospitality jobs.
Education and health services were the sectors that saw the most job growth in December, while financial services had the largest decline.
Gedney cautioned that the effects of low unemployment varied depending upon one’s position in the labor market.
“From the employer standpoint, they're obviously dealing with a very historically tight labor market. So there’s difficulty filling jobs,” he said. “From the employee standpoint, though, this is a great time.”
If a recession were to occur, Colorado’s economy might fare better than those of other states, depending on the nature of the recession.
“Colorado has a very diverse economy, so historically we’ve been able to weather recessions better than most states on average,” Gedney explained.
Average wages also increased from $28.92 per hour in 2018 to $30.33 in 2019.
The result of the growth, said Gedney, is that “we’re seeing people find jobs that are a great fit for them and also we’re seeing really strong wage gains.”