Colorado’s unemployment rate fell to 6.6% in January

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DENVER – Colorado’s unemployment rate dipped to 6.6% in January – down from a revised December rate of 6.9%, the Colorado Department of Labor and Employment said Monday.

That is still higher than the national unemployment rate of 6.3%, according to the household survey done in January which is used to find the states’ seasonally adjusted unemployment rates.

The number of people employed increased by 15,000 in January and the labor force grew by 6,700, according to the Colorado household survey.

Nonfarm payroll jobs increased by 32,000 from December to January, according to a separate survey of business establishments. The state has gained back 57.3% of the 375,8000 nonfarm payroll jobs lost between last February and April at the start of the pandemic and stay-at-home restrictions.

CDLE Senior Economist Ryan Gedney said the falling COVID-19 case numbers and loosening of restrictions that took place at the beginning of January helped drive down the unemployment rate and said he expects rates could continue to fall further into the spring because more restrictions have been lifted since January.

The leisure and hospitality sector saw around 21,000 job gains in January – by far the most of any sector – as restaurant, bar and hotel restrictions started to loosen. The CDLE said there were no major job losses from December to January.

The state’s annual unemployment rate was 7.3% in 2020 – lower than the national annual rate of 8.1%, and also lower than the annual rates seen in 2010 (9.2%) and 2003, during the previous two recessions, Gedney said.

But nonfarm payroll jobs decreased by 160,800 between January 2020 and January 2021 – about half of which came from the leisure and hospitality sector that has been hardest hit by the pandemic and restrictions.

Gedney said that the finance and insurance, transportation, management and retail and trade sectors had gained back most of the jobs lost during the last year but said jobs in the government sector and mining and logging had not seen near as many gains – mainly due to the dip in oil prices last year and school and university closures.

The Fort Collins, Colorado Springs and Grand Junction areas were all seeing more job recovery than the other metro areas of the state, with Boulder and Greeley lagging in recovery because of their education ties and ties to oil and gas, respectively.

Gedney said steadily declining rates in regular unemployment claims lined up with the drop in the unemployment rate and said it was “reasonable” to believe Colorado could follow the national decline in unemployment rates in February.

He said that the rate of people who are working part-time but would like to be working full time dipped to 5% in January – down 1% from December.

The state’s labor force participation rate is also nearing pre-pandemic levels, Gedney said. Colorado ranked sixth in the nation for the highest participation rate in 2020, which Gedney said was an “encouraging” sign for Colorado.

As for the rollout of the American Rescue Plan federal benefits extensions this past weekend, CDLE acting unemployment insurance division director Phil Spesshardt said it went smoothly overall.

But the department did discover that some people who have been on unemployment since the earliest days of the pandemic, in March, will have to file a new regular state claim first before they could reopen their Pandemic Emergency Unemployment Compensation (PEUC) claims.

Spesshardt said that the week ending April 3 will bring the largest group of people who will be required to do so, as that marks a year since the first big wave of initial claims.

Colorado’s February unemployment rate breakdown will be released on March 26.