The white-hot Colorado Springs area job market cooled despite a warm November, when the area’s unemployment rate rose to 3.5 percent, the highest in more than a year, the U.S. Bureau of Labor Statistics reported Thursday.
The November jobless rate was up from 3.3 percent in October, the third consecutive monthly increase and the fourth in the past five months. The November rate also was up from 3.4 percent in November 2016, the first time the area’s unemployment rate has increased from the same month a year earlier since June 2012.
Unemployment has been rising in the Springs area since it hit 2.5 percent in April, the lowest recorded rate since 1970, mostly because thousands of residents have entered or returned to the job market. The area’s labor force has expanded by more than 12,000 to nearly 341,000 in the 12 months ended in November, according to the federal agency. Nearly 1,300 people joined or returned to the labor market in November with 614 finding jobs and 660 still looking for work, increasing the number of unemployed to more than 12,000 for the first time since September 2016.
“It is premature to be worried about” recent increases, said Tom Binnings, a senior partner in Summit Economics LLC, a Colorado Springs economic research and consulting firm. “I am not concerned about an increasing unemployment rate since it is related to growth in the labor force.”
Unemployment rates rose in November across the state in every metropolitan area and statewide as the labor force grew. Colorado’s unemployment rate also rose for a third consecutive month, matching February’s 2.9 percent rate. Fort Collins had the lowest rate among the state’s seven metro areas at 2.6 percent, while Pueblo had the highest at 4.7 percent.
“You don’t want to see a pattern of rising unemployment, but if you do, people entering or returning to the labor force is a good reason,” said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum. “The key is whether the economy stays strong enough to absorb these workers.”
Another troubling sign came from the agency’s other job data, which measures local payrolls through a survey of employers (the unemployment rate is calculated from a survey of households). Payroll growth in the Colorado Springs area in the 12 months ended in November slowed for a third consecutive month to 0.9 percent, the lowest growth rate in more than five years. The tourism, retail and manufacturing sectors all shed jobs in November, compared with a year earlier, while health care, construction and local schools and colleges added the most jobs.
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