Colorados unemployment rate remains elevated at 6.2%

Colorado employers added 10,800 non-farm jobs between May and June, but it wasn’t enough to push down the state’s unemployment rate, which remained stuck at 6.2%, the Colorado Department of Labor and Employment said Friday.

Colorado tied with Maryland and Mississippi for having the 35th highest unemployment rate in the nation in June, a contrast to the pre-pandemic days when the state regularly boasted one of the lowest unemployment rates. The state also remains stubbornly above the U.S. unemployment rate, which was 5.9% in June.

Although some critics have blamed the Polis administration’s strict COVID-19 measures last year and tougher business regulations coming out of the legislature, Ryan Gedney, the state’s senior labor economist, said the state has a smaller share of adults disengaged from the job market than other states do.

“Colorado’s fast recovery in its labor force participation rate is a driving factor in keeping the state’s unemployment rate more elevated than the rest of the nation,” he said during a press call Friday to discuss the jobs report.

To be counted as unemployed, someone must be actively looking for work. Colorado’s labor force participation rate, or the share of working-age adults actively employed or looking for work, was at 68.7% in June, which is almost back to pre-pandemic levels and much higher than the U.S. participation rate of 61.6%, Gedney said.

Only the Dakotas have a higher share of their populations engaged in the labor force and Colorado’s recovery in participation ranks as the eighth strongest in the nation. If the U.S. labor force participation rate had covered as much as Colorado’s had, the country would be looking at an 8.1% unemployment rate in June, Gedney said.

Both in Colorado and nationally, the recovery in the labor force participation rate among workers of color surpasses that of white workers, according to Nick Sly, who supervises the Federal Reserve Bank of Kansas City’s Denver branch.

“Nationwide, the size of the Black and Hispanic labor forces picked is now near pre-pandemic levels, while labor supply among white workers remains relatively subdued,” he said.

He attributes it to the strong rebound in hiring in the leisure and hospitality sector, as well as in health care and education — two sectors that employ a higher share of workers from communities of color.

In Colorado, employers in leisure and hospitality added 5,300 jobs in June versus May, about half the total monthly gain, and they have added 67,300 jobs over the past year — the most of any sector.

Other strong June sectors were professional and business services and trade, transportation and utilities, which includes retail workers.

“I think within the next six months, we will hit a wall in industries such as hotels and air travel because not everyone is ready to travel. There may be a shortage of teachers and daycare operations,” Broomfield economist Gary Horvath predicted.

Women are still lagging behind when it comes to getting back into the labor force. Gedney said women have averaged 61.4% participation rate over the past 12 months versus 74.1% for men in Colorado.

Both rates, however, are getting closer to 2019 levels, which were 62.9% for women and 75.1% for men.

“Many women have returned to the workforce, but many may stay on the sidelines until they feel it is safe for their kids and family,” Horvath said.

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