Friday, July 20, 2012

Colorado employment continues growth, labor force almost back to peak levels

Colorado gained 34,494 jobs in June 2012 compared to June of 2011, and the non-seasonally-adjusted unemployment rate fell year-over-year from 8.5 percent to 8.4 percent. According to the most recent employment data, collected through the Household Survey and released today by the Colorado Department of Labor and Employment and the BLS, total employment in June, not seasonally adjusted, rose to 2.53 million jobs. The labor force also increased by 32,681 from June 2011 to June 2012.

In month-to-month comparisons, the (not-seasonally adjusted) unemployment rate rose from 8.2 percent during May 2012 to 8.4 percent during June. 26,200 jobs were added month-over-month while 34,200 people joined the work force over the same period.

From June 2011 to June 2012, total employment rose 1.3 percent while the labor force rose 1.2 percent. The total labor force in June included 2.76 million workers.

As can be seen in the second graph, total employment and total workforce size have risen, month-over-month,  after a series of ups and downs in recent months. Year over year, both employment and the labor force grew. Since employment grew more than the labor force, the unemployment rate fell. What we see overall is that both employment and labor force have been increasing in recent months, and that total labor force is now almost back to its 2008 peak.

The employment total is now 100,000 jobs below the peak levels experienced during July 2008 when there were 2.63 million employed workers. Compared to the labor force peak in July 2008, the labor force is now down by only 3,700 workers.The jobs deficit has been cut in half since late 2010, although the 100,000 below the peak does not include the jobs needed for all the new entrants into the workforce since 2008. Under normal conditions, the labor force would grow by 25,000 per year. This is a conservative estimate. So, in the four years since mid-2008, the labor force would have grown by an additional 100,000.  This means that to truly bring the unemployment rate down to 5-6%, the state needs to add 200,000 new jobs.  

In the third graph is shown the year-over-year comparisons, by percent, for total employment. June 2012 was the 18th month in a row showing a positive year-over-year change in total employment. The 18 months of increases followed 28 months in a row of negative job growth in year-over-year comparisons.

The graph also shows the year-over-change in the labor force. Total labor force size rose from June 2011 to June 2012 and follows 1 month of year-over-year decline in the labor force that occurred during April 2012. The labor force size had shrunk, year over year, for 18 months in a row from July 2009 to December 2010.

Overall this report shows that growth continues, albeit at a tepid rate.  The labor force growth signals that discouraged workers are beginning to rejoin the labor market, and this growth in the labor force will continue to prevent solid drops in the unemployment rate itself.

These numbers come from the Household Survey employment data, so the size of the workforce is dependent on the number of people stating that they are actively looking for work if not employed. Discouraged workers who have stopped looking for work are excluded. On the other hand, the Household Survey picks up on small business and start-up employment that may be missed by the Establishment Survey, the other commonly-used measure of employment.

Note: This analysis reflects newly revised data released in January. In most cases, total employment was revised upward for the months of 2011.