The unemployment rate for the Colorado Springs area soared to a record 10.2 percent in January, even as the number of people out of work across the nation has begun to decline, the Colorado Department of Labor and Employment reported Thursday.
The January jobless rate and the 31,481 unemployed residents for the month are both the highest in records dating back to 1970. The area’s unemployment rate was 9.5 percent in December and 9.7 percent in January 2010, according to revisions the department released Thursday for all of 2010. The area’s previous record unemployment rate and number of residents without jobs were both in March 2010 when 31,227 area residents, or 9.9 percent of the labor force, were out of work.
“This is the worst recession from a jobs perspective in my lifetime,” said Mike Kazmierski, CEO of the Colorado Springs Regional Economic Development Corp. “Companies figured out during the recession how to meet demand with fewer employees. And as demand has increased, they have been reluctant to add new employees in large part because of economic uncertainty at both the national and global levels. Not a day goes by that I don’t get a call or e-mail from someone desperate for a job.”
The picture wasn’t much better at the state level — Colorado’s unemployment rate jumped from 8.9 percent in December to 9.1 percent in January, the highest in records dating back to 1976 despite accelerating payroll growth. Grand Junction, Greeley, Pueblo and 31 of the state’s 64 counties posted double-digit jobless rates for January. Both the local and state rates were higher than the national jobless rate, which fell to 9 percent in January from 9.4 percent in December.
Widespread job losses after the holiday season in government, retailing and tourism reduced area payrolls in January to the lowest level since 2003, when the area’s economy was just starting to climb out of the previous recession. During the past year, job losses have been heaviest in construction, wholesale and the professional and technical services industry, more than offsetting modest gains in health care. Employment in the tourism industry also was up for the year, despite the losses in January.
The surging jobless rate in January wasfueled by nearly 4,200 residents returning to the job market, but fewer than half finding jobs. Part of the increase is a product of the state Labor Department’s annual revisions to unemployment and payroll data, which incorporated greater-than-expected population growth uncovered in recent Census data, but also determined that fewer area residents had stopped looking for work than monthly surveys had indicated, said Joe Winter, a department economist.
“It is going to take a while for the job market to reabsorb all of the people as they re-enter the market” after going back to school or working in a family business, Winter said. “Both Colorado and Colorado Springs traditionally enter and exit downturns later than the rest of the nation.”
Don’t expect much immediate improvement in the area’s job market as the local economy battles higher energy prices, government job losses resulting from budget cuts and rising long-term interest rates, said Tom Binnings, a partner in local economic consulting firm Summit Economics.
The department’s annual revisions to the payroll and unemployment numbers reflect a local economy that has been slow to recover from what likely has been the deepest downturn since the Great Depression. The revisions increased the area’s unemployment rate for every month of 2010.
The Springs area has lost 17,300 jobs on local payrolls since late 2007 in the current downturn, or nearly 5,000 more than the previous recession. The local economy took five years to generate enough jobs to replace the 12,400 jobs lost in the 2½ years of the previous downturn.
“It may take five or six years to recover the jobs that were lost in this recession, and that assumes the local economy can recover quickly enough before the next recession hits, which could be triggered by higher interest rates that could be needed to combat inflationary pressures” said Fred Crowley, senior economist for the Southern Colorado Economic Forum. “We very clearly are in desperate need of any jobs in this community right now.”
The state Labor Department will release February’s unemployment rate on March 25.