Colorado employers shed an estimated 4,700 nonfarm jobs between March and February, the largest monthly decline the state has suffered since December 2020, when a surge in COVID-19 cases triggered restrictions on indoor dining and resulted in a loss of 21,800 jobs.
Robust February job gains were cut in half on revision as well, from 6,200 jobs to 3,000, according to a monthly update from the Colorado Department of Labor and Employment released Friday. The state lost a net 2,400 jobs in the first quarter, making it one of only four states to have a job deficit in 2023.
Reductions were widespread, with the biggest losses coming in professional and business services, down by 2,200 jobs; trade, transportation, and utilities, down by 2,000 and financial activities, down by 1,900. Drilling deeper into individual sectors, losses were greatest in administrative support, retail and finance and insurance jobs, said Ryan Gedney, a senior labor economist with the CDLE.
The situation would be even grimmer absent a rebound in public sector hiring this year. Government employment counts in the state are still below where they were before the pandemic hit by about 5,700 jobs. But they are up by 5,800 in the first quarter of the year, and 1,500 last month, cushioning the blow from private sector cuts.
What is confusing is that what employers are reporting conflicts with what a separate survey of households is showing. Despite the loss of so many nonfarm jobs, the state’s unemployment rate fell from 2.9% in February to 2.8% and the number of people in the state describing themselves as employed rose by 11,900.
And all those people who supposedly lost jobs in the first quarter aren’t lining up to make claims for unemployment benefits. Either displaced workers are getting hired right away, or something is off in the count, Gedney said.
“I am leaning more toward the household survey being a more accurate reflection of what the state’s labor market and economy look like,” he said. Once employers file their unemployment insurance payment reports, a more complete picture will be known and revisions made. Right now it still looks like anyone who wants a job in Colorado can find one.
Based on the household survey and unemployment claims data, the state’s labor market was humming along at a strong pace in the first quarter. Based on the number of people employers say they are signing paychecks for each month, momentum has shifted and Colorado is shedding jobs and near the bottom for job growth among states.
Such a large decline in nonfarm payroll counts was initially a shocker, given how much it diverges from what employers reported nationally and how job reductions touched almost every sector, said Broomfield economist Gary Horvath in an email.
But it also lines up with a scenario where the Colorado economy may have slipped into the recessionary fog bank first, he said. The rapid cooling in the labor market could be serving as a harbinger of what other states may soon face.
“Warning signs are flashing because of three months of weak job growth and the lack of job growth in the sectors that typically drive the economy,” Horvath said.
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