Colorado’s August unemployment rate is 2.8 percent, close to the record low of 2.6 percent set back in the summer of 2017.
Only five states have a lower unemployment rate than Colorado.
Employers added 9,000 jobs in August, and the employment picture in previous months was revised up from initial estimates. Jobs continue to grow fast in Colorado and outpace local economists' predictions.
The state is basically at total employment, which is generally good. However, “unemployment is low enough that economists are going to keep a very close eye on inflation numbers,” said Andrew Friedson, Assistant Professor of Economics at the University of Colorado Denver.
Inflation is of some concern as state wages have risen consistently, in large part because employers must compete amongst each other for a limited pool of talent. Average hourly wages rose more than 4 percent since 2018, according to the August survey of households.
More wage increases are likely on the way. Denver Mayor Michael Hancock recently unveiled plans to raise the minimum wage to almost $16 an hour in a couple of years. Denver has already hiked the minimum wage for those employed by the city and for city contractors. The state is also considering sweeping changes to minimum wage protections to add industries not previously included, like construction.
Employers, especially in the restaurant business have sounded the alarm that these policy measures will damage thin profit margins in the industry.
The low unemployment rate keeps “the spotlight on Colorado’s tight labor as a major issue for employers in the state,” said Brian Lewandowski, an economist at CU Boulder.
Industries like construction and leisure and hospitality have struggled for years to find workers, even with rising wages.
It’s the same story with the high wage jobs. Software companies expanding rapidly in Colorado must offer relocation packages in some cases to pull engineers from other states. And luckily for the state’s economy, many workers have little problem with making the move to the Front Range.