Rising cases and restrictions hit Colorado economy hard in December

Colorado’s shift to the more restrictive Level Red status in November appears to have come at a high cost in lost jobs and rising unemployment last month, according to a report Friday from the Colorado Department of Labor and Employment.

The state’s seasonally adjusted unemployment rate rose from 6.4% in November to 8.4% in December, surpassing the U.S. unemployment rate of 6.7%, which remained unchanged last month. The number of unemployed workers shot up from 196,600 to 264,300 in a month, representing an additional 67,600 people without a job and actively looking for work.

The state lost 20,300 nonfarm payroll jobs in December, according to a separate survey of employers, with 20,600 jobs lost in the private sector and 300 jobs gained in the public sector. It marks the second consecutive month of declines for Colorado after a revised 4,700 jobs were lost in November.

“I was saddened, but not surprised to see the large decline in employment and the huge increase in the unemployment rate. What a way to start the year, ugh!” said Broomfield economist Gary Horvath.

After a big surge in COVID-19 cases this fall, Colorado moved 15 counties to Level Red in November, limiting indoor dining at restaurants and other activities. Although other states also tightened down in the face of rising caseloads, Colorado appears to have taken a much bigger hit economically in its effort to “bend the curve.”

“Substantial job losses are tied to leisure and hospitality,” said CDLE’s senior labor economist Ryan Gedney, noting that one sector alone lost 36,100 jobs last month.

As was the case in March and April, layoffs were concentrated among hotels, restaurants, and arts and entertainment venues. Delay in providing additional Paycheck Protection Program funds meant impacted businesses weren’t able to borrow money to keep their workers employed as business dropped off from already depressed levels.

Gedney notes that despite the heavy losses in leisure and hospitality, a few sectors posted big gains and most others only had minimal declines. Employment in trade, transportation and utilities rose by 10,200 jobs, with holiday retail hiring a likely contributor. Professional and business services rose by 5,100, while education and health services was up 1,100 and construction was up 1,000.

Colorado has gained back 191,500 of the 342,300 jobs lost between February and April. After leading the nation for months in gaining back jobs, the state’s job recovery rate is running at 55.9%, almost on par with the U.S. recovery rate of 55.6%.

Four Colorado counties had seasonally-unadjusted unemployment rates that moved into the double-digits in December, led by Pueblo at 11.3%, Huerfano at 11%, Gilpin at 10.6% and Costilla at 10.1%. Colorado’s unadjusted unemployment rate was 8.2%.

Gilpin County, home to several casinos, suffered the biggest point move in its unemployment rate, which shot up to 10.6% from 6.4%.

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