The unemployment rate in the Colorado Springs area surged in August to a nearly three-year high of 4.1 percent, even as another set of data is showing the strongest job market in more than 18 years.
The area’s jobless rate in August was the highest since November 2015 and puts the Springs unemployment rate above the national average for the first time since April 2014, according to data released Wednesday by the U.S. Bureau of Labor Statistics. The unemployment rate was 3.6 percent in July and 3.4 percent just over a year ago in August 2017.
Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum, said she wasn’t “too concerned” by the jobless rate increase, which she said was triggered by the local economy struggling to absorb an influx of more than 13,000 people into the area’s job market in the past 12 months. Employer job postings remain “robust” and reflect a shift in the local job market to higher-skill, higher-paying jobs.
“There are many other positive factors at work in the local economy, and a higher unemployment rate makes it easier for businesses to find workers and expand,” she said.
Tom Binnings, a senior economist for Summit Economic LLC, a local economic research and consulting firm, said he was surprised by the size of the increase in the area’s unemployment rate. He said the increase shows that the local “economy may be cooling a bit,” but added that “I’m not seeing anything that would point to a significant downturn.”
At the same time, local payrolls grew 4.1 percent from a year earlier to 299,200 in August, slightly slower than the 4.4 percent growth rate in July but still the strongest since January and February 2000. Half of that growth came from the professional, scientific and technical sector and the restaurant industry, which added 3,200 and 2,700 jobs, respectively.
The unemployment rate is calculated from a survey of households, while the payroll data comes from a survey of businesses. The two sets of data don’t always tell the same story and are revised annually to incorporate data from unemployment insurance reports most businesses file quarterly as well as population data from the U.S. Census Bureau.
Ryan Gedney, a senior economist for the Colorado Department of Labor and Employment, said the payroll numbers for the Colorado Springs area are overstated and likely will be revised downward.
Unemployment rates rose sharply across the state with rates in five of the state’s seven metropolitan areas increasing by 0.5 percentage points from July to August and the Denver area rising 0.4 percentage points. Colorado’s jobless rate edged up to 2.9 percent in August from 2.8 percent in July. The nationwide rate remained unchanged in August at 3.9 percent.
Gedney said the Colorado’s jobless rate did not increase as much as its metro areas because the seasonal adjustment process for the statewide jobless rate smooths out peaks and valleys, while the one used for metro areas does not.
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