Updated: February 6, 2014 at 6:58 am
The Colorado Springs area unemployment rate fell to a five-year low of 7.5 percent in December, but only because more than 1,200 people left the labor force, the U.S. Bureau of Labor Statistics reported Wednesday.
The December jobless rate was down from 7.8 percent in November and 8.8 percent in December 2012. It is the lowest unemployment rate for the area since 7.1 percent of local workers were without jobs in December 2008, just as the recession was taking hold locally but still well above what it was before the downturn.
The lower rate was a product of a smaller number of people in the labor force, either working or looking for a job. The December total of 311,165 was the fewest in the area's labor force since May 2007 and down nearly 3,400 from the same month a year earlier.
"The smaller labor force is due to an aging population and people leaving the job market after long-term unemployment benefits expired" in December, said Tom Binnings, a senior partner in Summit Economics LLC, a local economic research and consulting firm. "I expect to continue to see the unemployment rate drop for the same reasons during the next six months."
December payroll data wasn't much more encouraging, showing that the local economy added just 2,200 jobs since December 2012, a 0.4 percent growth rate that is the slowest since a small decline in March 2011. Payroll growth for all of 2013 averaged 1.3 percent, up from 0.8 percent during the previous year, but the 2013 growth rate is almost certain to be revised upward as part of an annual process that is scheduled be completed March 21 that incorporates unemployment insurance data reports from all employers.
The area's payrolls would have declined between December 2012 and December 2013 without big job gains in restaurants and bars, more than offsetting job losses in government, financial services and professional and business services.
Binnings said many of the job losses in government and professional and business services stem from automatic federal budget cuts that will not continue this year under a two-year budget deal signed into law late last year by President Barack Obama.
The unemployment rate is calculated from results of a survey of residents, while payroll data comes from a survey of businesses.
Unemployment rates fell sharply in all of the state's metropolitan areas between November and December - 0.3 percentage points in Boulder, Colorado Springs, Denver, Fort Collins and Grand Junction and 0.4 percentage points in Greeley and Pueblo. Colorado's jobless rate fell to 6.2 percent in December from 6.5 percent in November and the nation's unemployment rate fell to 6.7 percent in December from 7 percent in November.
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