At first glance, it might sound like bad news that the Colorado Springs area’s unemployment rate rose in May by the biggest percentage in more than 16 years, but a deeper look also shows the increase resulted from nearly 1,700 people joining the area’s labor market.
The 2.9 percent rate was up from April’s 2.5 percent, which was the lowest rate in Bureau of Labor Statistics data beginning in 1990 and no lower rate can be found in data calculated using a different method since at least 1970. The 0.4 percentage point increase was the biggest since September 2000. The May rate is still down from 4 percent in May 2016. The federal agency reported that the area’s labor force grew by 1,692 last month, but just 393 found jobs and nearly 1,300 were unemployed.
"I don’t consider this bad news, especially with the labor shortage" the area is experiencing, said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. "While it is fantastic to have a low unemployment rate, a lot of employers are saying they can’t find qualified labor. To the extent unemployment creeps up because more people are joining the labor force, it is likely that at least some of them are qualified for the open jobs in our area and that is a good thing. You have to remember it takes time for new entrants to be absorbed by the labor market."
The jobless rate increase in May is just the second this year – the area’s unemployment rate rose to 3.4 percent in February from 3.3 percent in January amid an even larger increase in the labor force. Job seekers have jumped back into the labor market in a big way during the first five months of the year – the area’s labor force has grown by 6,276 since December and nearly 7,000 more people were employed in May than in December, which reduced the number looking for work by nearly 700.
The area’s unemployment rate rose even as payroll growth in May accelerated to a 2.3 percent rate from a year ago, compared with a 1.8 percent annual rate in April. The payroll numbers come from a survey of employers while the unemployment rate is calculated from a survey of households. Nearly half of the 7,000 payroll jobs added in the 12 months ended in May were in health care – 1,800 – and retailing – 1,400. The leisure-hospitality and government sectors also added at least 1,000 jobs each. The manufacturing and information sectors were the only two sectors to shed jobs.
Jobless rates rose in every metropolitan area of the state between April and May with Fort Collins the lowest at 2.1 percent and Pueblo the highest at 3.8 percent. Colorado’s unemployment rate remained unchanged in May from April at 2.3 percent, the nation’s lowest jobless rate.
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