Colorado's Labor Force Hits 1979 Lows as Aging Population and Migration Shifts Drive Job Data

Key points

• Colorado's labor force participation rate fell to 65.2% in September, the lowest since September 1979, with a monthly loss of 3,050 workers.
• The state's unemployment rate increased by 0.1 percentage points to 4.1% in September, slightly below the national rate of 4.2%.
• Colorado added 2,400 total jobs in September, with private sector payrolls rising by 3,000 and government jobs declining by 600.
• The labor force participation decline is attributed to an aging population, with the 55-and-older workforce nearly doubling over 25 years, and reduced net migration.
• Average hourly earnings in Colorado rose to $40.19, exceeding the national average of $37.81, while the average workweek increased to 33.4 hours.

Background

Colorado's labor force peaked in October 2024 at approximately 3.25 million people, with a participation rate of 67.8%. The current decline marks a two-year downward trend, distinct from previous recession-driven drops, as the state's demographic makeup evolves faster than most other U.S. regions.

How outlets are covering it

The Colorado Sun and Colorado Springs Gazette both highlight the historic low in labor force participation and the rise in unemployment, but the Sun emphasizes the demographic and migration factors, while the Gazette focuses on the job growth figures and regional disparities. BizWest provides additional detail on county-level unemployment rates, noting that Boulder Valley and Northern Colorado counties underperformed the state average, with Weld County reaching 5.0%. All sources agree that the national trend mirrors Colorado's, but the Sun notes that Colorado still ranks ninth in the nation for labor force participation.

Why it matters

The shrinking labor force and rising unemployment, despite job growth, signal a structural shift in Colorado's economy. The aging population and reduced migration could impact long-term economic growth, workforce availability, and state revenue, requiring policymakers to address demographic challenges that differ from traditional cyclical downturns.

What to watch

Economists and labor officials will monitor whether the labor force participation rate continues to decline or stabilizes. The state will also track job growth in key sectors like construction and professional services, while addressing data revisions and demographic trends that influence future economic forecasts.