Colorado Springs unemployment rate rises to 8.5 percent

The Colorado Springs area unemployment rate rose to 8.5 percent in February from 8.4 percent in January, the third consecutive monthly increase after the jobless rate fell for much of the second half of 2009, the Colorado Department of Labor and Employment reported Friday.

February’s local unemployment rate, which is adjusted for seasonal changes, was the highest since July and is just slightly higher than the 8.4 percent rate a year ago. The local jobless rate peaked at 9 percent in June and fell to 7.6 percent in November before turning up again. However, much of the reason for the increase comes from an additional 5,000 people seeking work in the past four months. Nearly 3,000 of those job-seekers found work, but 2,000 are still searching, the department said. Even though it makes the numbers look worse, that’s a good thing, said Fred Crowley, senior economist for the Southern Colorado Economic Forum.

“People are hearing that the job market is getting a little better and are re-entering the labor force to look for work. That is a sign of an improving economy,” Crowley said.

Another measure of the local job market shows payrolls are stabilizing – the number of people holding payroll jobs fell by just 100 in February from January. Other than two increases in October 2008 and October 2009 — a result of holiday season retail hiring — the February employment decline is the least since May 2008. The payroll employment numbers come from a monthly survey of employers, while the unemployment rate comes from a monthly survey of residents.

However, local payrolls are still down 8,700 jobs, or 3.4 percent, from a year earlier with losses in nearly every sector of the economy. During that 12-month period, the construction industry shed 2,100 jobs and manufacturing, retailing, financial services and tourism each were down more than 1,000 jobs; the professional and business services as well as the education and health services sectors both added 200 jobs, the only sectors to add employment.

Since payrolls peaked in November 2007, the month before the recession began, local employment has declined by more than 18,000, or 7 percent, job losses that are unprecedented since the Great Depression, said Dave Bamberger of Bamberger & Associates, a local economic consulting firm. He estimated it will take the local economy at least two or three years to replace that many lost jobs, once employment resumes growing.

“Those who say this is a jobless recovery are right on. We are seeing improvement in indicators like city sales tax collections and housing construction, but the increases are from the very bottom. We have a long way to get back to where we were two years ago,” said Bamberger, who predicted that the area’s unemployment rate will continue rising through the summer months and may even top last year’s peak level of 9 percent in June.

The statewide unemployment rate rose to 7.7 percent in February from 7.4 percent in January and 7.3 percent a year earlier. Statewide payrolls in February were down 1,700 from January and off nearly 84,000, or 3.7 percent, from a year ago.
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