Colorado’s unemployment rate fell to 3.5% in May, its lowest level since the pandemic began.
And the state's economy has recovered more than twice as quickly as it did during the Great Recession, the Colorado Department of Labor and Employment announced Friday.
May was the 11th month in a row in which Colorado’s unemployment rate either dropped or stayed the same.
Based on household surveys, the department reported the unemployment level dipped .10% in May from April.
The rate in February 2020, the month before the COVID-19 pandemic struck, was a record-low 2.8%. As COVID-related restrictions were enacted and hammered businesses, Colorado's jobless rate zoomed to 11.8% in May 2020 before it began to fall.
The national unemployment rate has remained unchanged at 3.6% for the past two months.
The rebound in the state's unemployment rate has been about 2½ times faster than its recovery from the Great Recession, said Ryan Gedney, senior economist for the Labor and Employment Department.
“This pandemic recession has been substantially faster than the past two recessions,” Gedney said.
It took 59 months for the state’s jobless rate to rebound from the Great Recession and only 24 months for the state to bounce back from the pandemic.
Colorado was tied with West Virginia for the 28th-lowest unemployment rate in the nation, Gedney said. Nebraska (1.9%) had the lowest unemployment rate in May and New Mexico (5.1%) had the highest.
Gedney also noted that the state’s employment-to-population ratio was the highest it has been since March 2020 at 66.4%. It was at 66.9% in November 2019. The last time the state’s level broke 67% was in 2009.
It was the first time since 2012 that the participation rate exceeded 69% for two months in a row. Colorado is behind only Alaska and Oregon in the fastest rate of recovery for the labor force participation rate.
Pueblo had the highest unemployment rate in Colorado at 4.9%. Boulder and Fort Collins had the lowest unemployment rates at 2.4% and 2.6%, respectively, Gedney said. Denver, Colorado Springs, Grand Junction and Greeley all had rates between 3.1% and 3.3%.
“Colorado is one of only 14 states to return to a pre-pandemic level of nonfarm payroll employment (job recovery) so far,” Gedney said of the 5,400 nonfarm payroll jobs employers added from April to May.
The only sector that lost employees was retail, which shed 4,800 jobs from April to May.
“That's certainly something to watch for in the coming months,” Gedney said. “Is this a trend that continues or was it just a single month blip?”
The professional business services sector grew 3,000 jobs during that time period.
Gedney said it's unclear what the Fed's recent interest rate hikes and the bear stock market might do to Colorado’s labor market: “The crystal ball is cloudy in terms of what does this mean for the labor market."
“I think the Fed is really trying to target with what they're terming as a soft landing in terms of increasing the interest rate to a level that brings inflation down but does not impact the labor market more than we would want,” Gedney said. “I believe their most recent forecast for unemployment, U.S. unemployment rate in 2024 will be up slightly to a little over 4% — which is still historically low unemployment rate.”
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