The Colorado Springs area unemployment rate fell sharply in July to 6.8%,the U.S. Bureau of Labor Statistics reported Wednesday — not because of a flood of newly employed, but because nearly 8,700 fled the job market.
The rate was down from 10.3% in June, when more than 14,000 people returned to the area's job market as many businesses reopened after state officials relaxed restrictions to slow the spread of COVID-19. However, the area's jobless rate is still more than double the 2.9% low it reached in February and the 3.2% rate in July 2019.
Ryan Gedney, senior economist for the Colorado Department of Labor and Employment, said last month that the agency's internal data shows most of the decline in the state's labor force came from people who left the job market because they "didn't want a job now."
"It is good to have a lower unemployment rate, but not when you have a lot of unproductive people in the economy," said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. "The longer people are unemployed, the less likely they are to return to the labor force. It will be a long time before we have anything close to full employment again in the local economy."
The unemployment rate is calculated from a survey of households; a separate survey of employers showed strong private-sector payroll growth in July of 5,400 jobs. Nearly 60% of the gains — 3,200 — came from the restaurant industry, but more than half of the private-sector gains were offset by a 3,000-job drop in government employment, all of it in public elementary and second schools and colleges, most of which began the school year online. Local payrolls remain down 15,000 from the peak of 303,500 reached in February.
Jobless rates fell sharply in all Colorado metro areas, with Colorado Springs posting the biggest drop. Unemployment rates among the six other metro areas ranged from 6.2% in Fort Collins to 7.8% in Denver. Colorado's jobless rate fell to 7.4% in July from 10.6% in June, while the nation's unemployment rate decreased to 10.2% in July from 11.1% in June.