The Colorado Springs area unemployment rate fell to 3.1 percent in May, the lowest level in a year. The decline comes at the same time the number of people entering the labor force fell to the second-lowest level in more than three years.
The area’s jobless rate was down from 3.2 percent in April and matched the rate from May 2017. The rate fell because employers added 345 jobs, reducing the number looking for work by 290, according to data released Wednesday by the U.S. Bureau of Labor Statistics. The 55 people who entered the labor force in May were the fewest since a decline of 147 in January and smaller than any other month since March 2015.
“We haven’t seen much wage growth in the local economy because so many people were entering the labor force,” said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. “At some point, that growth is going to level off, keeping the labor market tight and limiting business growth. That likely will push wages higher.”
Tom Binnings, senior economist for local economic research and consulting firm Summit Economics LLC, said the slowdown in labor force growth is “something to watch,” but too early to see as a trend.
The unemployment rate is based on a survey of households. The agency also collects similar data from a survey of employers, which reflected continued strong job growth with local employers adding nearly 8,000 jobs since May 2017, a 2.8 percent growth rate. More than 2,000 jobs were added in that 12-month period in the professional and business services sector, which includes most defense contractors, but the leisure and hospitality; government; trade, transportation and utilities and construction sectors all added more than 1,000 jobs during the same period.
Unemployment rates fell from April in all Colorado metropolitan areas except for Greeley, where the rate was unchanged at 2.4 percent. Boulder and Fort Collins had the lowest rates at 2.2 percent, while Pueblo had the highest at 3.9 percent. Colorado’s jobless rate fell from 2.9 percent in April to 2.8 percent in May.