Colorado’s unemployment rate was expected to rise from 3.5 percent to 3.9 percent this year as more workers came back into the labor force, according to a forecast last December from the University of Colorado Boulder.
But not long after the Colorado Business Economic Outlook came out, Colorado’s labor markets took an unexpected turn. The state’s unemployment rate dipped to a historic low of 2.3 percent in April and stayed there in May and June, despite slower than expected job gains.
“Colorado employment in 2017 is now projected to increase by 55,800, or 2.2 percent for the year,” said Brian Lewandowski, associate director of the Business Research Division at the Colorado Leeds School of Business, as part of a midyear update for the original forecast.
Back in December, CU Boulder forecasters were calling for the addition of 63,400 jobs, which represented a 2.4 percent rate of growth. They expected the number of unemployed to rise from 100,500 to 114,000 during 2017.
That anomaly occurs because a good job market in theory will draw in workers on the sidelines. But in June, the number of unemployed stood at 67,193. The state has experienced that decline despite softer economic growth and slower than expected job gains.
Colorado’s GDP rose 0.4 percent between the fourth quarter of 2016 and the first quarter of 2017, according to a report from the U.S. Bureau of Economic Analysis. By contrast, in Texas, state GDP was up 3.9 percent, Washington was up 2.7 percent and Utah 1.9 percent between the fourth and first quarters.
For all of 2016, Colorado’s GDP rate rose 2 percent, which was the 10th-fastest of any state. The three fastest-growing industries that helped drive that growth were information, up 8 percent, construction, up 5.3 percent and education and health services, up 4.9 percent.
Colorado for two months had the lowest unemployment rate in the country, until South Dakota joined it at 2.3 percent in June. Fort Collins-Loveland had the lowest metro unemployment rate in the state, at 2.1 percent, followed by Boulder at 2.3 percent, Greeley at 2.5 percent and metro Denver at 2.5 percent. Even the laggards, Grand Junction at 3.6 percent and Pueblo at 4 percent, had unemployment rates below the U.S. average in June of 4.4 percent.
What makes Grand Junction’s low unemployment rate stand out is that it added only 200 jobs the past year, and its 0.2 percent annual rate of job growth ranked 330th in the country. Despite that, its unemployment rate fell from 6.1 percent in June 2016 to 3.6 percent in June 2017.
