Low Colorado unemployment rates and good job growth at the end of 2014 signal Colorado is heading into 2015 with strong economic momentum, however tempered by sagging oil prices, economists said Tuesday.
For the year, Colorado logged the biggest proportional drop in unemployment in the nation, as healthy hiring lowered the rate to 4 percent from 6.2 percent. Colorado’s employers added 62,300 jobs, boosting its payrolls 2.6 percent, the nation’s 10th best job gain.
About 4,700 jobs were added in December, according to a report by the Colorado Department of Labor and Employment.
The unemployment rate was 3.8 percent in metro Denver in December and 3.9 percent in and around Greeley, at the heart of the northeastern Colorado oil patch.
In the past six months, oil prices dropped about 57 percent from a high of $107 per barrel and prices were down 51 percent year-over-year, according to the University of Colorado Boulder Leeds School of Business. Benchmark U.S. crude rose $1.08 Tuesday to close at $46.23 a barrel in New York.
But the labor department’s chief economist, Alexandra Hall, and Broomfield economist Gary Horvath both said Colorado’s highly diversified economy will help the state weather low oil prices — at least for a while.
Hall said if prices climb back to $60 or $70 per barrel in the next few months, there is likely to be little impact on jobs. If the low prices persist and there are oil-field layoffs, those workers will easily transition to other industries that are short on employees, such as construction, she said.
“Colorado oil and gas accounts for about 10,000 jobs across the entire state,” Hall said. “But it is still a very small part of our overall economy when we are talking about 2.5 million payroll jobs in Colorado.”
Horvath noted that in 2014, about 60 percent of job growth was in construction, health care, accommodations and foods services, retail trade and professional and technical services.
“Admittedly the price of oil will have an effect on the rate of job growth in 2015,” Horvath said. “However, at a statewide level, most of these sectors will show steady growth.”
Hall said she also was encouraged by improved unemployment rates among youth and the long-term unemployed.
“Overall, 2014 was a great year for Colorado,” she said. “2014 grew faster than 2013. We are seeing growth rates now that we haven’t seen since prior to the 2001 recession in Colorado.”
During 2014, the national unemployment rate sank to 5.6 percent from 6.7 percent. Employers nationwide added nearly 3 million jobs last year, the most since 1999.
The Associated Press contributed to this report.