Colorado among states with lowest unemployment rates, but recovery still elusive everywhere
By Thamanna Vasan
CFI Fiscal Policy Analyst
Colorado is one of only eight states to experience a decline in the unemployment rate since June, figures released from the U.S. Bureau of Labor Statistics show. The July report also shows 30 states experienced an increase in unemployment, and 12 states reported no change [i]. While Colorado is experiencing increased job creation and low unemployment rates the recovery from the Great Recession remains slow. Colorado unemployment rates are higher than those of previous recessions and job creation is not rapid enough and remains below pre-recession levels.
Unemployment
In July, Colorado experienced a slight decrease in the unemployment rate from 5.5 percent in June to 5.3 percent in July. The state unemployment rate is 1.4 percentage points lower than a year ago. The last time the unemployment rate was 5.3 percent in Colorado was in October 2008. The national unemployment rate saw a slight increase from 6.1 percent to 6.2 percent. While Colorado’s unemployment rate continues to decline and remains below the national average (Figure 1), it only ranks 16th among states [ii].
Employment and the Labor Force
In addition to a steadily decreasing unemployment rate, Colorado is experiencing a growth in job creation. In July, 5,500 new jobs were created in Colorado. Many of the industries responsible for this growth are the same industries that suffered the largest job losses in the wake of the Great Recession. The construction industry, for example, has lost 31,000 jobs since December 2007. However, the industry has experienced a significant amount of growth over the past year with the addition of 7,700 new jobs. The rate of job growth in many industries has also been greater in Colorado when compared to national rates. Coupled with the decrease in the unemployment rate, these trends are encouraging.
Unfortunately, despite these new jobs, recovery remains slow and inadequate. Following the recession, Colorado experienced 26 months of job loss and has since recovered 101,700 jobs. This job creation has not kept pace with the growth in the population of working age Coloradans, resulting in a high job deficit.
In order to keep up with the 10.7 percent growth in the working age population, an additional 150,300 jobs must be created. In order for Colorado to return to pre-recession rates and keep pace with population growth, the state will need to create 7,000 jobs over the next three years.
In addition to a great job deficit, unemployment rates are still significantly high when compared to those of the past two recessions.
In the period of recovery following the 1990 recession, the unemployment rate at 79 months was 3.5 percent compared to the current 5.3 percent.
Similarly, the unemployment rate 79 months from the start of the 2001 recession was 4 percent.
[i] Regional and State Employment and Unemployment June 2014, U.S. Bureau of Labor Statistics
[ii] Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey Data
