The Colorado Springs area job market got both good and bad news for August: The jobless rate fell from the previous month while payrolls grew at the slowest rate this year.
According to data released Wednesday by the Colorado Department of Labor and Employment, the area's unemployment rate fell in August to 8.3 percent from 8.4 percent in June and July, but the decline resulted from nearly 500 area residents leaving the job market rather than finding jobs. To be considered part of the job market, people must either be employed or looking for work. The area's jobless rate was 9.2 percent a year ago.
Area payrolls - indicating the number of jobs added - rose in August by slightly less than 1 percent, compared with a year earlier - the first time payrolls have grown that slowly since December. Much of the slowdown resulted from job losses in the real estate, construction, retailing and tourism industries, which offset growth in education and health care.
The unemployment rate is calculated from the results of a survey of residents, while payroll data comes from a survey of employers. Both sets of data are compiled by the U.S. Bureau of Labor Statistics, which remained closed Wednesday as part of the federal government shutdown. The state labor department posted the data Wednesday on its website.
Tom Binnings, a senior partner of Summit Economics LLC, a local economic research and consulting firm, said the local economy benefitted earlier this year from the arrival of an aviation unit at Fort Carson and strong housing construction. But the gains from the aviation unit already have played out, and construction is starting to slow as mortgage rates rise. The local tourism and retail industries also took a hit from flooding that hit western El Paso and eastern Teller counties in August, which caused repeated closures of U.S. Highway 24 near Manitou Springs, he said.
"We are probably seeing the impact of the flooding as well as sequestration (automatic federal budget cuts) in the August numbers," Binnings said. "I was pleasantly surprised with the strength of the local economy during the first half of the year, but the strength during the second half will depend on how long the federal government stays shut down, how deep the next round of cuts will be in sequestration and how high mortgage rates go."
Unemployment rates fell in every other metropolitan area of the state except for Pueblo, which remained unchanged at 9.7 percent. Boulder had the lowest jobless rate among the seven metro areas at 5.2 percent.
The state's unemployment rate was 7 percent in August, down from 7.1 percent in July. The U.S. unemployment rate fell in August to 7.3 percent from 7.4 percent in July.
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