Job growth in El Paso County slowed in the second quarter to its slowest rate in nearly three years amid a worsening labor shortage, according to data released Wednesday by the Colorado Department of Labor and Employment.
The 2.4 percent increase from the second quarter of 2016 matches the growth rate in the third quarter of 2014 and is down from 2.8 percent in the first quarter. The county's job growth has slowed in two of the past three quarters and all but two quarters since peaking at 3.5 percent in the final quarter of 2015.
The slowing growth has come as the unemployment rate in the Colorado Springs area, which includes El Paso and Teller counties, has declined from 4.1 percent at the end of 2015 to 2.5 percent earlier this year. The jobless rate has since edged up to 2.9 percent in September, the latest month for which data is available.
The slowing growth rate is "absolutely due to a tight labor market, but 2.4 percent is still a very healthy growth rate. The trend in Colorado Springs is similar to Denver and the state as a whole," said Ryan Gedney, senior economist with the department.
The number of openings at the Pikes Peak Workforce Center has exceeded the number of people looking for work since early 2015 though the gap has narrowed in recent months to about half the level it had reached earlier this year, said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum.
"While the rate of increase is slowing, it is still more than enough to absorb the growth in population and I would still call our job growth robust," Bailey said.
Nearly 60 percent of the 6,455 jobs added in the county during the 12 months ended June 30 were generated by just three industries - construction, health care and other services, a broad category that includes call centers. Two industries shed jobs - retail was down 302 jobs during the period and information was down 266 jobs.
Despite the slowdown, the county's job growth was still slightly above the statewide average of 2.3 percent during the same period. Colorado's job growth has slowed in the past two years as the state's unemployment rate has dropped to the lowest level in at least 40 years and has ranked as the nation's lowest several times this year.
Even as the county's job market has tightened, wage gains have been sporadic. The county's average weekly wage rose just 2.4 percent from a year earlier to $899 in the second quarter, down from an 8.1 percent jump in the first quarter, Much of the slowdown in wage gains is the result of a 3 percent drop in average wages in the health care industry. The average wage for all other industries was up 5.8 percent during the same period.
Bailey said the falling wages in the health care industry may result from increased use of lower-paid physician assistants, nurse practitioners and nursing assistants because of the difficulty in recruiting primary care doctors and registered nurses. The Pikes Peak Workforce Center had 1,300 openings in October for registered nurses, she said.
The wage and job growth numbers are compiled from unemployment insurance reports that most employers must file every three months and are a more accurate measure of the county's job market that monthly data from the U.S. Bureau of Labor Statistics, which is based on surveys of employers.
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