Friday, December 21, 2012

Payroll employment increases in Colorado, unemployment rate falls

The non-seasonally-adjusted unemployment rate fell from 7.6 percent during November 2011 to 7.5 percent during November 2012. According to the most recent employment data, collected through the Household Survey and released last week by the Colorado Department of Labor and Employment and the BLS, both the labor force and the employment total were essentially flat from November 2011 to November 2012, with the labor force falling 0.7 percent, and total employment falling 0.5 percent, year over year.

With the labor force shrinking slightly more than total employment, the unemployment rate dropped.

During November 2012, the labor force consisted of 2.13 million workers, while total employment was at 2.51 million employed persons.

According to the Household Survey employment totals, total employment remains approximately 123,000 employed persons below the employment peak reached during July 2008.

The first graph shows the unemployment rate (not seasonally adjusted):

The second graph shows total employment is up from levels seen during 2009 and 2010, but so far this year has grown only slightly over 2011 levels. Total labor force, on the other hand, is now back up near peak levels.

Total employment, according to the Household Survey, is now back at levels reported during early 2007.

The third graph shows payroll employment collected through the Establishment Survey of employment, and shows the year-over-year change in payroll employment in Colorado. While the Household Survey showed employment remaining flat year over year, the Establishment Survey showed gains in payroll employment, with year-over-year gains reaching the highest level seen since January 2008.

Year-over-year growth in the Establishment Survey has usually been under 2 percent since the last recession, and this is generally a smaller growth rate than what was common during the last expansion from 2003-2008. Year over year growth in payroll employment climbed to 2.2 percent from November 2011 to November 2012.

The very large losses that occurred during 2009 and 2010 were the largest losses, by percentage, in at least 30 years. Job gains in recent years don't compare with the robust job gains seen during the boom years of the 1990s.

The weak jobs report form the Household Survey contrasts with the more robust report from the Establishment Survey. Theoretically, this could be due to a situation in which small employers shed jobs while larger employers added workers. Or, it could be a data-collection problem with one or other of the surveys. Given that the Establishment Survey is much larger in sample size than the Household Survey, it is likely that there was indeed payroll growth over the period, although it may well be that smaller employers have been shedding jobs also.