During a month that saw U.S. unemployment rise marginally, Colorado saw its own unemployment rate drop to 4.2%, with another 4,200 Coloradans joining the workforce, according to the latest tally by the state’s Department of Labor and Employment.

A household survey by the agency calculated 64.6% of the state’s age-16-plus population was on the job last month, marking a tenth-of-a-percent increase over the month previous. The employment-to-population ratio for the entire U.S. stood last month at just under 60%, basically unchanged.

Lower workforce participation

Meanwhile, the state’s numbers show that the size of the labor force decreased here in August to 3,275,600 workers, showing a lower percentage than before and marking the lowest labor participation rate in almost five years, the department reported.

Colorado businesses tracked an additional 3,000 nonfarm payroll jobs over the month, and a separate tally of private sector payroll jobs rose by 3,300. However, some 300 government jobs were lost over the period.

The department’s numbers typically include a caveat that its estimates of non-farm jobs are derived from a survey of businesses and agencies and measures numbers of jobs, not the actual number of people employed. The household survey of the percentage of Colorado’s population currently working, the department notes, is based on small numbers and is statistically less reliable than the larger business job survey.

Year-over-year increase

The new numbers represent the lowest unemployment rate for the state since June 2024, according to the Common Sense Institute, which released its own summary of new Colorado data from the federal Bureau of Labor Statistics. The institute also noted that over the year, government employment in Colorado has actually increased by 9,500 jobs, outpacing the private sector’s jobs growth.

CSI bills itself as “a non-partisan research organization dedicated to protecting and promoting the economy,” according to its website.

State labor data called out several sectors of the employment market that posted marked increases in August, including educational and health services, up greater than 3,000 jobs, and professional and business services, up 1,700 jobs. Financial related employment fell in the state over the month, down 2,100 jobs.

The state agency also noted that since a year ago, nonfarm payroll employment has increased by 18,300 jobs, by 8,800 jobs in the private sector and 9,500 in government. Biggest gains were in educational and health services, leisure and hospitality, and information. Losers included financial activities (down 4,900 jobs), trade, transportation, professional and business services, and utilities (down 2,400).

Hourly earnings up

From a year ago, Colorado’s overall rate of job growth has been .6%, underperforming the U.S. rate of just under a full percent.

Average hourly earnings in Colorado grew a buck-and-a-half over the year, from $37.72 to $39.13, and now runs $2.60 an hour higher than the national average, the state agency reported.