Colorado’s unemployment rate is holding steady, but the pace of job creation is slowing as U.S. regulators attempt to hit the brakes on spending to tame inflation.
Colorado added 800 jobs in January, according to the most recent data from the state’s department of labor and employment. During the same timeframe last year, Colorado gained 6,700 jobs.
The unemployment rate was unchanged from December at 2.8 percent, the data show.
The anemic job growth in January could be due to unseasonably bad weather, according to Ryan Gedney, a state economist.
“It was historically cold and historically snowy … That certainly has some impact for a lot of sectors, like construction,” Gedney said during a conference call with reporters.
Economists are dissecting monthly employment statistics for signs the Federal Reserve’s campaign to stamp out inflation by raising interest rates is starting to drag down the job market.
Higher interest rates make it more expensive for businesses and consumers to borrow money, which should eventually lead to lower prices. But that could also lead to job losses if businesses are forced to cut back on hiring.
Broadly speaking, the U.S. job market has proven resilient so far. Still, there are pockets of weakness starting to show.
In Colorado, both financial services and construction are losing jobs. In January, finance lost 1,300 jobs, while the construction industry shed 1,100 jobs.
“A high-interest rate environment certainly can impact employment over the long term for those sectors,” he said.
On top of that, widespread layoffs in the technology sector are bound to take a toll eventually, he said.
“If I look at some of the trends for information in … 2022, we did see some weakness,” Gedney said. “Colorado, and particularly some of the urban corridors, have a high concentration in that type of employment. I could certainly see some impact leaking into the state. I don't think the state would be immune.”
Colorado is tied with New Hampshire for the 10th lowest unemployment rate in the U.S., the labor department data show. The state’s unemployment rate reached a low of 2.6 percent in August, down from the pandemic peak of 11.6 percent in May 2020.
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