DENVER – Colorado’s unemployment rate fell to 4.1% in January, and the state has regained nearly all the nonfarm payroll jobs lost in the first two months of the COVID-19 pandemic, as well as all the private-sector jobs, according to the state labor department.
The Colorado Department of Labor and Employment released its January labor data on Monday, which showed the January seasonally adjusted unemployment rate fell one-tenth of a percentage point from the adjusted December 2021 rate of 4.2% (revised down from 4.8%).
Colorado has regained 368,400 jobs of the adjusted 374,500 lost in March and April of 2020, meaning it is just 6,100 jobs short of recovering 100% of the jobs lost during the initial wave of pandemic job losses.
CDLE Principal Economist Ryan Gedney said that amounted to the 11th-fastest rate of recovery in the U.S. and that the February data, which will be released March 25, would likely put Colorado above that 100% recovery rate for the jobs lost at the start of the pandemic.
The 4.1% unemployment rate is the lowest since it was 2.8% in February 2020. Colorado reported its first COVID-19 case on March 5, 2020.
Gedney said around 86,000 Coloradans were unemployed in February 2020, compared to about 132,000 as of now – hence the gap in the unemployment rate. But that was at the end of a lengthy economic expansion following the Great Recession, and the unemployment rate in February 2020 was the lowest it has been in Colorado.
Gedney said if the current trends hold, he expects Colorado to reach a 3% unemployment rate sometime in the next year or so.
But Colorado labor force participation rate has grown quickly during the latter part of the pandemic, adding more than 180,000 people since July 2020 and growing by about 16,700 people in January, Gedney said, for a rate of 68.5%, which exceeds the labor force participation rate of 68.4% in February 2020.
Colorado employers added 6,700 nonfarm payroll jobs between December and January and 6,300 private sector jobs. Private sector job recovery is about 103% of the jobs lost during the first two months of the pandemic.
The 20 months it took to get from the peak unemployment rate during this latest recession of 11.8% in May 2020 to the January 4.1% rate was also much quicker than past recessions, Gedney said. During the recession in the early 200s, it took 41 months to go from the peak unemployment rate back down to 4.1%. And during the Great Recession, it took 51 months to go from the peak back down to 4.1%, Gedney said.
Gedney said the “really, really strong” federal response to the pandemic, including the CARES Act, federal unemployment assistance programs, and American Rescue Plan, and the federal dollars pumped into the economy, have proved beneficial for the recovery.
“Only two years in, I think the recovery is faster than I and others anticipated,” Gedney said.
There are still some sectors – including government jobs and the mining and logging industries – that still lag in terms of recovery. He said the latest data is the first wave of positive news in terms of economic recovery, and there should still be further increases in terms of the employment to population ratio.
Gedney said there are about 17 states that currently have unemployment rates that are lower than pre-pandemic levels, but he said he believes some of those states are struggling to fill empty jobs and add more jobs.
After doing benchmark revisions to data from last year, the annual unemployment rate for Colorado in 2021 was 5.4%, which was the same as the U.S. annual rate.
The state expects to release February unemployment data on March 25.