Colorado’s unemployment rate plunged to 7.3 percent in August from 7.8 percent a month earlier — the sharpest monthly drop since the summer of 1983.
Colorado was one of 16 states where the unemployment rate declined in August; it rose in 27.
But in a conflicting signal, Colorado employers reported shedding 5,300 jobs on a seasonally adjusted basis in August.
“You tend to get mixed news at a turning point,” said Alexandra Hall, chief economist with the Colorado Department of Labor and Employment.
So how can unemployment fall so much when there are fewer jobs? Fewer people are looking, experts say. Job hunters must be actively looking for work in a given month to meet the official definition of unemployed. If opportunities are so meager that they stop looking, they fall into another category: discouraged.
“Much of the tick down in the unemployment rate in August was due to an increase in the number of discouraged workers who’ve decided to wait it out for now,” said Natalie Mullis, chief economist for the Colorado Legislative Council.
Fewer people — 13,100 — described themselves as unemployed in August than in July, adjusted for seasonality. And the overall labor force shrunk by 8,200, an approximate count of those “dropping out.”
But there also were 4,900 more people who described themselves as employed in August. With fewer payroll jobs to be had, it is likely those individuals are trying to make it on their own.
“When payroll jobs aren’t there, people give up on looking for someone else to provide a paycheck, and they form their own businesses,” Hall said.
That was the pattern in the 2001 downturn, and it is emerging again in this recession.
All industry categories except government, hospitality and leisure, and “other service providers” shed jobs in August. Government hiring rose as teachers and school staff came back on the payroll.
The most jobs lost last month — 2,900 — were in trade, transportation and utilities. Educational and health services, a rare provider of jobs the past year, saw fewer workers last month.
“Even though wage and salary employment is down some, the losses have started to tail off,” Hall said.
