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While the recent grand opening of Tractor Supply Company, the groundbreaking for Wal-Mart and the facelift for the former downtown City Market complex are all good indicators, perhaps the best sign the local economy is heading in the right direction is this month’s employment situation.
The unemployment rate in Archuleta County plummeted to 5.5 percent in May, according to a report issued last week by the Colorado Department of Labor and Employment. While it dropped nearly a percentage point from 6.3 percent in April, it was down two full points over the year, from 7.5 percent in May 2013.
Furthermore, the decline is mostly due to more people finding work; it’s not so much a matter of the unemployed moving away or reaching the end of their benefits period.
The total labor force rose from 6,142 in April to 6,371 in May, while the number of people with jobs went from 5,753 to 6,019. This means the number of people claiming unemployment fell from 389 to 352 over the month.
The same trend can be seen over the year, with a total labor force of 6,149 in May 2013, including 5,686 with jobs and 463 claiming unemployment.
Looking at the employment situation for the rest of the state, Costilla County had the highest unemployment rate for the month with 10.6 percent, while Baca County had the lowest with 2.7 percent.
The average unemployment rate for the entire state decreased two-tenths of a percentage point in May to 5.8 percent. The last time the Colorado unemployment rate was 5.8 percent or lower was November 2008, when the rate was 5.7 percent.
The number of people participating in the labor force increased 3,100 over the month and the number of people reporting themselves as employed increased 7,500. The larger increase in total employment than in the labor force caused the number of unemployed to decrease 4,300 and the unemployment rate to decline to 5.8 percent.
Over the year, the unemployment rate declined one and one-tenth of a percentage point from 6.9 percent in May 2013. The number of Coloradans participating in the labor force increased 46,900, total employment increased 73,900 and the number of unemployed decreased 27,000.
By comparison, the national unemployment rate declined from 7.5 percent in May 2013 to 6.3 percent in May 2014 and remained unchanged at 6.3 over the month from April to May.
Colorado’s total employment reached a series peak of 2,611,300 in March 2008, the number of unemployed reached a series peak of 246,700 in October 2010, and the unemployment rate peaked at 9.1 percent in October 2010 and has declined almost without interruption since.
“We are continuing to see strong improvement in the Colorado economy,” CDLE Chief Economist Alexandra Hall explained last week. “The over-the-year growth is about three percent, while the national over-the-year growth is one point seven percent for the same month. We continue to improve faster than the United States as a whole.”
The unemployment rate, labor force, labor force participation, total employment and the number of unemployed are based on a survey of households. The total employment estimate derived from this survey is intended to measure the number of people employed.
Nonfarm payroll jobs estimates, on the other hand, are based on a survey of business establishments and government agencies, and are intended to measure the number of jobs, not the number of people employed.
The business establishment survey covers about seven times the number of households surveyed and is therefore considered a more reliable indicator of economic conditions.
“Something to consider when looking at the unemployment rate,” Hall continued, “is standing alone it doesn’t provide enough information to really gauge how the state is doing, because people will leave a state if the economy is not improving fast enough relative to other states. That will put downward pressure on the unemployment rate, and conversely, when a state is doing well, as Colorado has been, people will move to the state and put upward pressure on the unemployment rate.”
Nonfarm payroll jobs increased 9,100 over the month from April to May to 2,443,800 jobs, according to the survey of business establishments. Private sector payroll jobs increased 8,700 and government increased 400. Colorado has had 31 consecutive months of payroll job gains.
The largest over-the-month private sector job gains were in construction, professional and business services, and leisure and hospitality. There were no significant over-the-month declines.
Over the year, nonfarm payroll jobs increased 70,500. Private sector payroll jobs increased 65,000 and government increased 5,500. The largest private sector job gains were in professional and business services, leisure and hospitality, and education and health services. Information was the only sector to decline over the year.
“When we have compared Colorado payroll jobs growth — the rate of growth — to other states, we usually come out in the top five to seven states, so Colorado is doing quite well compared to other states in payroll jobs growth.”
Other series based on the survey of business establishments and government agencies include private sector average weekly hours, average hourly earnings and average weekly earnings. Over the year, the average workweek for all employees on private nonfarm payrolls decreased from 34.6 to 34.1 hours, while average hourly earnings increased from $25.47 to $26.28.
For the first time in several years, youth employment numbers are on the rise in Colorado, according to a separate CDLE report.
Job seekers 16 to 19 years of age have seen a 16.5-percent increase in employment. In the 12 months from May of 2012 through April of 2013, 29.4 percent of teens were employed. The latest data, covering May 2013 through April of 2014, shows that number rising to 32 percent.
Based on these new results and current labor force conditions, economists with the Department of Labor and Employment are expressing cautious optimism about the summer outlook for teenagers seeking full-time and part-time work.
“Teens have to learn how to market themselves for the job market,” explained Steve Wright, who oversees the Governor’s Summer Job Hunt, Colorado’s longest-running employment program for young people, “and staff at Workforce Centers across Colorado can show them how to do it successfully. Of course, this is our biggest time of the year but our work isn’t restricted to one season. We act as job brokers and guidance counselors on a year-round basis.”
Teens looking for job opportunities and employers looking for young workers should contact the nearest Workforce Center. For a complete listing of locations, go to colorado/cdle.wfc.