As final numbers are tallied, the job market in Colorado did considerably better than initial reports that come out monthly — nearly 40,000 jobs better.
Payrolls increased 2.5 percent in 2023, which put Colorado in 11th place compared to other states when it comes to job growth, according to state economist Ryan Gedney. That compares to earlier estimates that put Colorado in the bottom 15 states for job growth.
The new data comes from an annual benchmarking process done across the U.S. to clean up employment data collected throughout the year. The final numbers always change from earlier estimates, but the discrepancy in Colorado’s data was unusually large for 2023, according to Gedney. The state's jobs were undercounted by about 37,000, he said.
“What this really means is a lot rosier picture for Colorado’s labor market than … what we were seeing,” Gedney said during a conference call with reporters. “It was one of those years where … [the monthly statistics] just really fell short in terms of telling an accurate economic story.”
Monthly jobs numbers have seen big revisions for the past year in both Colorado and the U.S., making it more difficult to get a real-time reading on the economy. Part of the problem is that those early responses are calculated using voluntary surveys, and businesses aren’t responding as frequently as they used to.
“I think it’s a national problem,” Gedney said.
The final data shows that Colorado gained an average of 4,900 jobs per month in 2023, up from 2,000 monthly jobs, according to Gedney. Some of the biggest upward revisions were in private health care and social assistance, he said.
State and local government was the biggest job creator in Colorado last year. Preliminary data shows government hiring is off to a strong start in 2024, too. But Gedney expects the boom in government jobs to cool as the year progresses.
While Colorado’s job market is strong overall, there are pockets of weakness.
“There is still this divergence going on,” Gedney said. “There's industries with strong growth and there's industries with weak or negative growth.”
Colorado businesses that are sensitive to interest rates, like financial services, are showing job declines. And some things that really took off during the pandemic, like warehousing and delivery services, are starting to slow.
“I think those employment levels are starting to stabilize or reduce as they’re trying to figure out what works best for their businesses,” Gedney said.
