When Denver economist Ryan Gedney looked at a report on first-quarter job growth among Colorado’s private employers, something huge stood out. The state had overcounted the number of jobs at the start of the year. Instead of adding jobs, Colorado lost 72,700.

The state had the biggest revision in jobs and rates compared to all 50 states in the benchmark report, coming in at minus 2.5%.

If true, the overcount would reverse all job gains this year, as well as hike up the state’s unemployment rate up to 50% higher in recent months. In other words, instead of 4% as reported in August, Colorado’s unemployment rate would have been 6.1%. The last time Colorado felt such pain was during the recessions of the early 2000s and the Great Recession.

“There’s no way to sugarcoat it, these recent employment trends from the (Quarterly Census of Employment and Wages) paint an extremely grim and dire situation for Colorado, one in which the state is highlighted as a national leader for recessionary activity,” Gedney wrote.

But the Colorado Department of Labor and Employment doesn’t believe the job numbers are dramatically worse. It points to other economic data that shows local companies are still hiring, weekly jobless claims haven’t spiked and inflation has slowed all year. Last year, the state’s job growth was up 2.2% from the prior year. That slowed to 1.6% in September, which is better than forecast and is the same as the U.S. rate. And that’s still growth.

“I think we have so many other things that are pointing at the economy being reasonably healthy that, again, the whole country has experienced a slight softening … which is very much in line with what the Fed was doing with higher interest rate policy,” said Timothy Wonhof, a program manager who tracks the job data for the state’s labor department. “We, like everyone else, have probably had a mild softening but we haven’t had the kind of drop that would be reflected in those numbers given out by the BLS.”

The cause of the unexpected data hasn’t been determined yet, state labor department officials said. They are still investigating the inconsistency. A big technology update to the state’s unemployment system last fall is most likely to blame.

To back up a bit, monthly job data is gathered from a small sampling of employers to provide a more immediate sense of changes to jobs or workers. This is the Current Employment Statistics, a monthly survey of 119,000 businesses and government agencies nationwide.

But a more comprehensive report comes out months later called the Quarterly Census of Employment and Wages. QCEW is based on what employers share about current jobs and wages. Employers are required by law to share updates because states use it to calculate an employer’s unemployment insurance premiums. Rates can grow higher if a company has more layoffs since employers — not taxpayers — pay into a fund to provide unemployment benefits. QCEW is used to calculate a company’s unemployment premium.

QCEW is normally considered very high-quality data. It’s also used to benchmark the monthly job data. But then something odd happened in Colorado. The Bureau of Labor Statistics called it “unusual” and likely due to the “modernization” in a special note.

The modernization

When Colorado upgraded the technology running its unemployment system in October 2023, there was an immediate change in the number of jobs and wages that employers reported, said Cher Haavind, the state labor department’s deputy executive director.

“The timing lines up,” Haavind said. “Is it logical to think it’s some reporting mechanism? Is it not understanding the new system? We actually haven’t gotten to the root cause yet. We’re working with some vendors and some folks internally to get to the root cause. We just know that we saw an anomaly in the reporting of wages on Oct. 1 last year when we modernized.”

There are theories on what might have happened. After the update, the labor department gave employers a grace period to file their job and wage data. The delay may have impacted results. Or it could be confusion around the newer state requirement for paid family leave, which many employers and employees began paying for in January 2023. Haavind said the department plans to survey the employers where they’re seeing the greatest differences and see if more training needs to be offered.

But already, they’re seeing the employer reports are coming in with data better than one would think if the state was drastically losing jobs.

“We’re seeing it trending in a more positive direction. We are seeing more accurate reporting coming in. To what do we attribute that to? We don’t know yet,” Haavind said. “What really matters is what do we think is going to happen in the quarter next year? This could be noise. This could work itself out. We could see some equalization.”

If the data is found to be valid, it could cause major revision of how we understand the state’s economy. So far, University of Colorado economists who help with the annual Colorado Business Economic Outlook each December are moving ahead with the belief that the loss of 72,700 jobs in the first quarter this year is not correct.

“This implies that Colorado has recorded significant job loss in 2024,” Brian Lewandowski, executive director of the Business Research Division at the University of Colorado’s Leeds School of Business, said in an email. “This would imply an economic contraction (recession). Based on a breadth of economic data, we do not believe this is the case. This poses economic modeling challenges when considering what is the true historical time series of employment in order to produce a good forecast. We are operating under the assumption that the historical series will not be revised down to the magnitude first reported by the BLS.”

But because the data is suspect, it’s still a concern for Gedney, who used to work for the state’s labor department.

“Guess we’ll see when the data of Q2 is published, but it’s tough to count on it as a reliable economic series at this point,” Gedney said.

The second quarter QCEW update comes out Nov. 20.

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Sun economy stories you may have missed

➔ The collapse of two well-funded heavyweights in Colorado’s outdoor recreation realm. Future Legends, the struggling developer of an 118-acre sports complex in Windsor files for bankruptcy while The Pro’s Closet closes shop after 18 years and nearly $100 million in funding >> Read story

➔ To close $1B budget gap, Colorado’s governor proposes Medicaid provider pay freeze, transportation fee cut and K-12 funding slowdown. Gov. Jared Polis’ 2025-26 state budget proposal would also privatize a state workers’ compensation insurer in order to generate $500 million over the next 5 years >> Read story

➔ Oil company agrees to clean up historic lead contamination in settlement with small Colorado mining town. The mayor and state are hailing a deal with Atlantic Richfield Co. to finish digging up yard waste and recap roads to remove lead hazard from the tiny town of Rico >> Read story

➔ As voters are set to decide if Colorado keeps more sports betting revenue, tribes are suing to keep their share. Proposition JJ would remove a cap on revenue the state can collect from online sports betting. A federal lawsuit aims to maintain tribal nations’ tax exemption if passed. >> Read story

➔ Techstars plans return to Boulder with a whole new look after its departure fractured the entrepreneur community. Techstars Colorado will be a partner — but not owned or controlled by — the original tech accelerator that started in Boulder but left town and ended its local program this year. >> Read story

➔ Tri-State won $2.5 billion to close coal plants, get new renewable energy for rural customers. Officials say the funds will deliver 1,280 megawatts of renewable energy, more than 100 megawatts of energy storage and 2,000 new jobs in the West >> Read story

➔ Nov. 5 is Election Day. See The Colorado Sun’s Voter Guide for an easy-to-digest guide to the candidates and measures. >> Get informed

Other working bits

➔ Colorado job openings flat in third quarter. Job seekers hunting for a new gig in the state saw fewer openings as July turned into September, down 0.2% during the three-month period, according to Aspen Tech Labs, which tracks online job postings. The minimal change had Colorado faring better than 18 other states, according to the report produced for the Colorado Chamber of Commerce.

The Fort Collins area saw the biggest metro-area decline, dropping 7% to 6,448 listings, while the town of Rifle’s job openings increased 28% to 2,993 listings. Careers with the biggest growth in listings? Accounting, then pharmacy, finance and insurance. “Combined with other metrics on Colorado’s economy suggesting improved inflation and low unemployment, we’re seeing positive signs for the statewide business community,” Colorado Chamber President and CEO Loren Furman said in a statement. >> View report

➔ Airports see dip in September passengers. After a surge in 2023, Colorado Springs Airport saw an 8.3% decline in passengers in September to just under 200,000 travelers, according to airport officials. As travelers returned to the air last year and helped airports like DIA reach records, that post-pandemic urge to fly seems to have subsided. Fall also tends to be a slower period, said Dana Schield, a spokesperson for the Colorado Springs Airport. Year-to-date, however, COS travel is up 9.6% from the same period last year, she added.

As for Denver International Airport, the busy hub also saw a very slight decline in domestic travel in September, down by 0.3% to 6.54 million passengers compared with last year. But an increase in international trips helped DIA gain 0.4% in total passengers for the month compared with a year ago. For the year so far, passenger trips are up 7.5% from 2023, according to DIA data.

• Colorado Springs to Cancun nonstop. Flights start June 2025 via Southwest Airlines. The once-weekly nonstop trip will also be the airport’s first international flight and will run through the summer. >> Details

➔ November is Colorado Apprenticeship Month. At least it is this year, thanks to Gov. Jared Polis’ proclamation. It’s also part of the state’s push to promote the State Apprenticeship Agency that works with companies to create job-training opportunities for workers who are looking for something new. While there are activities galore, one event geared to the curious is the Digital Apprenticeship Expo, Nov. 18-22, to showcase companies with registered apprenticeships (sign up), as well as how to start one or apply for one (link for jobseekers). >> Details

• $600,000 available to invest in lineworker apprenticeships. To attract more workers into the field of installing, maintaining and repairing electrical power lines and equipment, the state is offering a total of $600,000 in grants to companies with registered apprenticeship programs. The funds are intended to help companies absorb the cost of training and attracting more lineworkers. >> Details

Got some economic news or business bits Coloradans should know? Tell us: cosun.co/heyww

Thanks for sticking with me for this week’s report. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara

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