Unemployment hits 4-year high in Springs

   The Colorado Springs area unemployment rate surged to a 4½-year high of 6 percent in June as weak job growth failed to provide enough opportunities for the growing number of people seeking work, the Colorado Labor and Employment Department reported Friday.

   The area's jobless rate, which is adjusted for seasonal changes, was up from 5.7 percent in May and has increased in nine of the past 12 months. A year ago, 4.1 percent of the area's residents were out of work. The Springs area unemployment rate is now the highest since January 2004.

   The local unemployment rate has increased sharply in the past year because the number of people in the job market has grown by nearly 6,200 while the number of people working has remained flat. As a result, the number of residents out of work has jumped by nearly 50 percent during the past year to 19,320, the highest monthly total in five years and the second-highest ever.

   "The slowdown in the national economy is really dragging down the local economy," said Fred Crowley, senior economist for the Southern Colorado Economic Forum. "This reflects the employment losses in the core of our local economy - the primary jobs that bring income from outside the area into our economy. Those losses haven't been replaced and will continue to be felt in the rest of the local economy over the next year or so."

   Primary jobs losses in the area have come mostly from the evaporation of the hightech industry and customer support and calling centers.

   The numbers don't reflect the job cuts planned next year by Hewlett-Packard Co., which is consolidating its local customer and technical support operations to Arkansas and New Mexico and its local information technology unit to Fort Collins. Nearly 1,000 workers have been told they must move to keep their jobs, but how many will be laid off hasn't been determined because the company's deadline for accepting a transfer is weeks or months away.

   Payroll numbers in Friday's report paint a slightly more optimistic view of the Springs area economy, showing payroll employment in June growing by 0.8 percent from a year earlier - but that is the slowest monthly growth rate in a year. The payroll numbers come from a survey of area employers and are not adjusted for seasonal changes, while the jobless rate is calculated from a survey of area residents and is adjusted for seasonal changes.

   Much of the area's payroll growth is being fueled by local government and health care, which each have added at least 1,000 jobs during the past year, more than offsetting declines in construction, financial services, information technology and manufacturing. The tourism and services industry also contributed to area payroll growth during the past year, but to a lesser extent than government and health care.

   Crowley said he is concerned that area payrolls will start declining in the fall, after the summer tourism season has ended. Falling payrolls are considered by many economists as a sign that the local economy has slipped into a recession.

   Despite the gloomy numbers, Dave Bamberger of Bamberger & Associates, a local economic research firm, said the local economy remains resilient by continuing to grow - albeit slowly - despite a sagging U.S. economy, rising energy prices and housing and financial market slumps.

   Statewide unemployment numbers followed a similar trend - the state's rate in June hit 5.1 percent, the highest since September 2005. That's up from 4.9 percent in May and up from 3.7 percent in June 2007.

   An estimated 2.36 million Coloradans have payroll jobs, which is up about 32,000 from a year ago. But job growth compared with a year earlier has slowed to 1.4 percent in May and June from 2.5 percent in July, August and September.

   The national unemployment rate in June held steady at 5.5 percent. 

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