State labor force shrinks, joblessness dips

Colorado’s unemployment rate is higher than the national average for the first time in seven years, according to August unemployment data released Friday.

From July to August the state’s unemployment rate dropped one-tenth of a percentage point – from 8.3 percent to 8.2 percent. The national unemployment rate, meanwhile, dropped two-tenths of a percentage point to 8.1 percent.

La Plata County also saw a noticeable decrease in its not-seasonally adjusted unemployment rate. La Plata County’s jobless rate dropped from 6.7 percent in July to 6.3 percent in August, which is exactly where it was a year ago.

But the decrease in unemployment in the state and in the county is primarily because of an increasing number of people dropping out of the labor force, rather than a jump in employment.

“We had a large decline in labor-force participation with a smaller decline in total employment,” Alexandra Hall, the Colorado Department of Labor and Employment’s chief economist, said during a conference call Friday.

In La Plata County, about 150 fewer people were unemployed in August than in July, but 284 fewer people were employed over the month.

The number of jobs in the state remained unchanged from July to August.

The drop in people looking for jobs is a change from the early summer months when a growing number of people entered the labor market. The influx of people, combined with an unchanged job market, caused unemployment to climb in April, May, June and July.

The office of labor and employment’s seasonal adjustment formula accounts for an expected influx of people into the labor force during the summertime, but with such a large potential labor force, this year the jump was more exaggerated.

The state is seeing “a lot of seasonal movements we haven’t seen in previous years,” Hall said.

“While we’re going through a period of slow growth, we may be seeing people coming in and testing the labor market ... then moving back out if they weren’t successful,” Hall said.

The wildfires that tore through Colorado this summer struck a blow to the leisure and hospitality sector over the last several months, causing that industry to add fewer jobs than normal, Hall said. While she pointed to Colorado Springs as the most glaring example, summer blazes also affected the local economy.

In La Plata County, the Durango Area Tourism Office saw a 1.9 percent decrease in lodgers tax in July. Officials speculated that was a result of wildfires raging across the Southwest at the time.

Gary Derck, CEO of Durango Mountain Resort, said the mountain also saw visits dip in July despite a 3 percent increase in summer visits overall.

While Hall was hesitant to label Colorado’s situation one of “job stagnation,” she said the state is still on a path of “very, very slow, slow progress.”

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