More Colorado workers left the state’s labor force last month, likely due to retirement, moving or perhaps just giving up looking.
The loss of 3,050 people in one month sent the state’s labor force participation rate down to 65.2% in September, the lowest since Sept. 3, 1979, according to the state Department of Labor and Employment. There are still about 3.18 million people in the state’s labor force, a decrease of 75,000 from last year.
And the downward trend is similar to what’s happening nationally, said Tim Wonhof, the state’s director of labor market information.
“Colorado is currently experiencing historically low levels of labor force participation, reflecting a long-term downward national trend,” Wonhof said Friday in an email. “As of August, Colorado is still ranked in the top ten compared to other states – we are ranked 9th for labor force participation.”
The state’s workforce is aging as people work past the traditional retirement age of 65. The number of “55 and over has almost doubled in the last 25 years,” he added. But the other reason often given is that fewer people are moving here.
Those declines affect all sorts of jobs data, including the state’s unemployment rate, which rose a tenth of a point to 4.1% from August. Nationally, the unemployment rate increased at the same rate to 4.2%.
“Unlike previous periods of decline associated with recessions, the most recent change is due to rapid population aging and declining net migration,” Wonhof said. “This landscape presents unique challenges for the state’s workforce as Colorado’s demographic makeup is changing faster than most other regions in the United States. »
But the declines, including slowing job growth, are impacting the state’s two-year employment data.
Colorado’s labor force peaked in October 2024, when there were about 95,000 additional people and 67.8% of all working-age Coloradans were employed or looking for work. Age may be the reason, but there is limited local data to support that hypothesis, said Bill Craighead, an economist and program director at the UCCS Economic Forum in Colorado Springs.
“It appears that the decline we saw this year is steeper (but) we don’t have estimates of the labor force participation rate for people ages 25 to 54 like we do nationally — so it’s hard to be sure,” Craighead said in an email. “Another thing we don’t have at the state level is the measure of ‘discouraged workers’ that we have in the national reports. So while on the surface the decline in labor force participation is concerning, we don’t know how much of it is due to negative reasons – that is, people giving up on finding a job – or more benign reasons.”
The state tracks workers in part-time jobs who would prefer a full-time role. Since the start of the year, an average of 2.6% of the working population has been considered “involuntary part-time workers”, according to the official term. This is an improvement from 5.8% in 2020 and a decrease from 3.3% in 2025.
Private employers added more jobs last month, reporting a preliminary increase of 3,000 nonfarm payroll jobs. The sectors that gained the most were construction, professional and business services, and information. Jobs in the trade, transportation and utilities sector lost 1,900 during the month. The number of government jobs fell by 600.
August employment data was revised to show a drop of 300 jobs instead of a drop of 1,400. The state added 800 jobs per month on average over the past year.
Job numbers are updated regularly, so it is sometimes difficult to interpret the data before revisions are made.
“One thing to be careful about is that every year they reset the population controls used to generate the totals for the household survey numbers, like labor force and employment, but they don’t adjust them back, so there are often these weird jumps in the data in January,” Craighead said. “That’s why it’s often better to look at numbers based on ratios, like the unemployment rate, rather than the raw number of employees or labor force.”
Gn bussni
