Colorado’s job market steps into 2023 on solid footing

Colorado’s economy charged forward undeterred last month, with the state’s unemployment rate falling and hiring staying firm as the year came to a close, according to a monthly update from the Colorado Department of Labor and Employment.

The state’s unemployment rate fell to 3.3% in December from 3.5% in November, reaching its lowest level since July and remaining below the U.S. unemployment rate of 3.5%, according to a survey of households.

Employers in the state added an estimated 8,600 jobs last month and over the past year, they have added 104,700 on a seasonally-adjusted basis although that count will likely change once revisions are completed in the coming weeks. In another sign of strength, the number of payroll jobs added in November was revised higher, from 4,300 to 5,300.

“I was shocked to see the increase in employment for November, the significant gains in December, and the low unemployment rates. It is always great to get good news on a dreary, cold winter day. It seems that Colorado is doing a better job holding off the headwinds than the U.S. We can only hope that continues,” Broomfield economist Gary Horvath said.

A reduction in the size of the state’s labor force last month contributed to the declining number of unemployed workers, said Ryan Gedney, a senior economist at the CDLE during a news call Friday morning.

To be considered unemployed, someone must be actively looking for work. And to be in the labor force, they must be either employed or unemployed. The state’s labor force shrunk by 7,200 people last month, but over the year rose by 74,000 to 3.24 million. The number of unemployed people fell by 6,700 last month and is down by 26,300 on the year.

The rate of working-age adults participating in the labor force fell to 69% in December from 69.2% in November and participation has been shrinking since hitting a recent peak rate of 69.6% in August. Still, Colorado is doing much better than the country as a whole, which has a participation rate of  62.3%.

Every job sector in the state added jobs last year with the exception of financial activities, which includes banks and lenders, insurers and real estate firms. The losses there totaled a net 3,400 jobs last year in Colorado, due primarily to rising interest rates which hit mortgage lenders especially hard.

The biggest job gains last year came in professional and business services, up by 31,900;  leisure and hospitality, up by 20,300; and trade, transportation and utilities, up by 10,600.